Why DDP Terms Are Not Recommended for Shipping
11.06（Updated on 11.10）
Many importers believe that DDP (Delivered Duty Paid) is the most convenient Incoterm because it seems to cover everything—shipping, customs clearance, duties, and taxes.
However, based on our professional experience, DDP often carries compliance risks, hidden costs, and tax issues, especially for China to Australia logistics.
1. Legal and Compliance Risks under DDP
Under DDP terms, the seller is responsible for all import procedures in the destination country, including customs clearance and payment of duties and taxes.
To fulfill DDP, some freight forwarders may use under-declared values or informal clearance methods, which can result in:
- Customs inspections or cargo detention
- Heavy fines or confiscation of goods
- Negative records on your company in the customs system
2. Why DDP Seems Cheap—Mixing Sensitive Cargo
Some freight forwarders reduce costs by mixing sensitive goods (such as e-cigarettes) with general cargo.
This practice significantly increases customs inspection rates, which can lead to:
- General and sensitive goods being detained together, causing shipment delays
- Potential confiscation or destruction of goods
- Your company name being flagged in the customs system
Once your company is flagged, even future shipments using legitimate DDU or EXW methods may face higher inspection rates, which can seriously affect long-term import operations and company reputation.
3. Hidden Costs
While DDP quotes may appear attractive, they often hide additional charges.
To “guarantee” all-inclusive delivery, freight forwarders may pass on extra costs—inspection fees, storage fees, re-clearance, or port surcharges—after shipment, sometimes deducted from the declared value.
Additionally, once goods arrive, the seller has little control over customs procedures, making it difficult to resolve issues remotely.
4. GST Cannot Be Claimed Back
When goods are imported under DDP, GST is paid by the seller.
As an importer, you cannot claim GST refunds in Australia, which can increase overall costs and put pressure on cash flow in the long run.
5. A Better Option: EXW + Professional Door-to-Door Service
We strongly recommend using EXW (Ex Works) terms and letting a professional freight forwarder (such as Real Logistics) handle the full door-to-door shipping process.
Benefits include:
- Full transparency and control over all shipping and customs clearance costs
- All documents (commercial invoices, packing lists, etc.) reflect actual declared value
- Ensures goods are 100% compliant, legal, and traceable
6. How We Operate
With Real Logistics’ EXW door-to-door service:
- GST is reported and paid at actual value with no under-declaration
- Formal GST invoices are issued to the importer before customs clearance
- After clearance, a Customs Entry from the Australian authorities is provided, showing detailed GST calculations
This approach ensures a safe, transparent, and compliant shipping process.
✅ Conclusion
Avoid the risks and hidden dangers of DDP. Choose Real Logistics’ door-to-door logistics solution for safe, legal, and transparent China to Australia shipping.
We make international trade efficient, secure, and worry-free.
Here’s an example of one of our client’s previous DDP shipments. The vessel departed on August 25, but it took over 20 days just for customs clearance, resulting in a total transit time of 73 days.
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We take care of every procedure from picking-up to delivery
Contact our sales representative to find the most suitable logistics solution for you.
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