DAP, DDP, and DDU all promise some version of "delivered" freight, and suppliers use the three terms almost interchangeably on commercial invoices. They are not interchangeable. The difference between them is a single, expensive question: who pays the import duty and who is legally on the hook for clearing customs in your country? Get that answer wrong and you find out at the worst possible moment — when your container is sitting at the destination port and nobody has claimed the customs bill.
What DAP actually means
DAP (Delivered at Place) means the seller arranges and pays for freight all the way to a named destination — but the buyer handles import customs clearance and pays any duties and import taxes. The seller's obligation ends once the goods are made available, ready for unloading, at the agreed destination; everything from that point, including clearance, sits with the buyer.
That split makes DAP one of the cleanest terms for buyers who already have a customs broker relationship: you know the freight cost upfront from the seller's price, and you control the import side — classification, duty calculation, and clearance — through your own broker instead of trusting the seller's arrangement. It also means duties never get buried inside the unit price, so you always know exactly what customs charged versus what freight cost.
What DDP actually means
DDP (Delivered Duty Paid) puts everything on the seller: freight, export clearance, import clearance, and duties, all the way to the buyer's door. On paper it's the most convenient term for a buyer — one delivered price, nothing else to arrange. In practice, it only works if the seller genuinely has the capability to clear goods in your country, which not every exporter does.
For a seller to perform DDP, they need either their own registered entity or broker relationship in the destination country, or a customs bond that lets a third party clear on their behalf. Many smaller exporters quote DDP without either in place. When the shipment lands, the seller's forwarder often turns to the buyer anyway to supply an importer-of-record or handle the clearance directly — at which point you're doing DAP-level work for a DDP-level price, with no adjustment to what you already paid.
What DDU actually means (and why you shouldn't use it)
DDU (Delivered Duty Unpaid) was the predecessor term to DAP: seller delivers to the named destination, buyer clears customs and pays duties. It is not an official Incoterm — the International Chamber of Commerce retired DDU in the 2010 Incoterms revision and replaced it with DAP, which covers the same obligations under a name that fits the current rulebook.
You still see "DDU" written on commercial invoices and purchase orders, usually by sellers or freight forwarders working from old templates. Functionally, treat it as DAP: seller pays for delivery, buyer pays duty and handles import clearance. If a supplier quotes DDU, ask them to confirm the term as DAP under Incoterms 2020 so the contract references a rule set that's actually still in force — it removes any ambiguity if a dispute over responsibility ever comes up.
Side-by-side: who pays what
| DAP — freight to destination | Seller pays |
|---|---|
| DAP — import clearance & duties | Buyer pays and arranges |
| DDP — freight to destination | Seller pays |
| DDP — import clearance & duties | Seller pays and arranges — if they can actually clear locally |
| DDU — freight to destination | Seller pays |
| DDU — import clearance & duties | Buyer pays and arranges (same split as DAP; DDU is not an official Incoterm since 2010) |
| Official Incoterm today | DAP and DDP: yes. DDU: retired, superseded by DAP |
The practical difference between DAP and DDP isn't the freight leg — both put that on the seller. It's entirely about the last mile: who is the importer of record, who fronts the duty payment, and who eats the delay if customs holds the shipment for a classification query.
Why the choice matters more than the paperwork suggests
A duty bill under DAP or DDU lands with the buyer directly, which means you see the actual amount customs assesses and can dispute or appeal it yourself through your own customs brokerage partner. Under DDP, the seller (or their broker) pays that bill and folds it into what you already agreed to pay — so if the seller under- or over-estimated duty exposure when they priced the deal, that's their margin problem, not yours, provided the term was quoted honestly.
The risk cuts the other way too. A seller who quotes DDP without a real clearance capability in your country can leave a shipment stuck at the border while they scramble for a broker or a bond, racking up storage charges neither party budgeted for. Picture a container moving on the Shanghai to Los Angeles lane under DDP terms: if the exporter's nominated broker isn't set up to clear at that gateway, the box can sit dockside past free time while the paperwork gets sorted, and someone still has to cover the storage bill regardless of who technically owed the duty. That's the scenario worth asking about before you sign: not "can you do DDP," but "who is your licensed customs broker in my country, and how many shipments have they cleared there this year."
Duty amounts themselves are set by customs authorities at the point of entry, based on the classification, origin, and declared value of the goods — no freight forwarder, including Holo Cargo, prices or predicts that number in advance. A freight quote covers freight and handling; the duty bill is calculated separately, at clearance, by customs.
Which term should be on your purchase order?
- Choose DAP if you have (or want) your own customs broker relationship and want full visibility into what duty customs actually assesses.
- Only accept DDP after confirming, in writing, that the seller has a working import clearance setup in your destination country — not just a willingness to quote the term.
- Treat DDU as DAP and ask the counterparty to update the contract language to the current Incoterms 2020 wording, so there's no dispute about which rulebook applies.
Whichever term ends up on the invoice, the Incoterms guide walks through how DAP and DDP fit alongside the other eight terms, and the free route calculator can confirm the nearest port or air gateway to the destination named on the term — useful when "named place" on a DAP contract is a city rather than a specific port.
How the Incoterm shows up on your freight quote
The Incoterm on your purchase order determines what your Holo Cargo quote covers. Under DAP or DDU, your quote itemises freight and destination handling, and duty is calculated separately by customs at clearance — it never appears as a predicted line item on the quote itself. Under DDP, the seller's price already includes freight and duty, so your own quote (if you're arranging any leg directly) starts from wherever the seller's responsibility ends. Holo Cargo's operators and customs-brokerage partners confirm which term applies before filing, so the right party is named as importer of record from the start.
