DDP vs DDU Shipping, and the SOP Each One Needs

DDP and DDU look like a question about who pays the duty. The bigger question is who does the customs work. Someone has to sign the entry, check the commercial invoice, pay a broker and keep the proof. Pick a term and you have given that work to a person. It is also the work that rarely gets written down.

For a US Shopify store, the terms show up in two places. One is inbound freight from a supplier. The other is outbound orders to customers in other countries. Each needs its own procedure.

What is the difference between DDP and DDU shipping?

Import customs clearance. Under DDP (Delivered Duty Paid), the seller handles and pays for export, transit and import formalities, duties and taxes included. Under DDU (Delivered Duty Unpaid), now called DAP (Delivered at Place), the buyer clears the goods into their country and pays the duty.

ICC Academy's comparison of the two rules puts it plainly: the key difference is import clearance. Almost everything else matches. Under both, the seller arranges and pays for transport to the agreed place. Risk passes to the buyer at the same moment: when the goods arrive there, ready to unload. And under both, the buyer unloads.

Is DDU still an Incoterm?

No. DAP replaced DDU in the 2010 revision of the Incoterms rules, and Incoterms 2020 still uses DAP.

This matters more for a written procedure than for a contract. If your SOP says "DDU shipment" and your forwarder's portal says "DAP", a new hire has to guess whether they mean the same thing. They do. Say so once in the document. Use DAP in anything you sign from now on, and keep a note that older supplier contracts may still say DDU.

Who owns each customs step under DDP and DAP?

Here is the split, step by step. This is the table worth pasting into the SOP itself.

One cost sits outside the table: the carrier's brokerage and disbursement fee. Shopify's help page on carriers and shipping terms says the carrier charges this fee, not customs. So it isn't included when you charge duties at checkout. Decide who absorbs it, and write the answer down.

When can a seller not use DDP?

When the destination country won't let a foreign seller clear the goods. The same ICC Academy article notes that some customs authorities require the local importer, the buyer, to handle import clearance. In those countries DDP can't be used, and DAP is the right term.

There is a tax trap too. Trade Finance Global's DDP guide warns that the seller may need to register for import and for VAT or GST in the buyer's country. The seller may also be unable to recover the VAT it pays. If it can't be the importer or can't recover that VAT, the guide says to use DAP instead.

So DDP is a decision per country, and it should be recorded per country.

What changes in Shopify when you charge duties at checkout?

Charging duties and import taxes at checkout is how a Shopify store sells on DDP terms. Read Shopify's considerations page for the feature before you switch it on. These are the limits that catch people out:

• It doesn't work with tax overrides or manual tax rates. Those only apply to sales in your own region, and the feature overrides them for international sales.
• Duties are only calculated on international shipments, based on the location the order ships from. No duties are calculated on orders within one country or between EU member states. VAT and sales tax on those orders follow your normal tax setup.
• You choose DDP or DAP for each country or region. You can't offer both in the same one.
• You can't collect duties in the Rest of world shipping zone. Add the country to an existing zone, or create a new one.
• Every checkout that calculates duties carries a transaction fee, test orders included.
• The duties charged are an estimate. Customs can charge more, for example when an HS code is wrong.

Write down where the setting lives: which shipping profile and which zone carries DDP. "We turned duties on" is not something anyone can find later. Our post on how Shopify shipping rates work covers profiles and zones.

Which carriers support DDP labels in Shopify?

A short list. Through Shopify's own carrier accounts, you can buy DDP labels for Canada Post (US destinations only), DHL Express, DHL Express Canada and DHL eCommerce. With any other carrier on Shopify's accounts, you can't buy a label for an order where duties were collected. You have to buy the label elsewhere or refund the order.

The label step matters more than it looks. Shopify's help page on additional tasks for duties sets out four rules:

• Check for a Duties line on the order before you buy a DDP label. If checkout hit an error, duties may not have been collected, and the order needs a standard label.
• If you collect duties and then print a standard label, the customer is charged again on delivery. They pay twice.
• Mark the commercial invoice DDP when duties were paid, and DAP when they weren't.
• If you refund an order that has already shipped, you can refund the duties. The carrier won't refund what you paid for the DDP label.

Your outbound procedure depends on a carrier list you don't control. Put the list in the SOP, with the date you last checked it.

What goes in the SOP for each term?

Write one procedure per term, not one general customs document. The steps differ exactly where money and liability move.

Inbound freight on DAP or DDU (you clear it)

• Who your customs broker is, and who at your company authorizes them.
• Where the commercial invoice, packing list and bill of lading arrive.
• The HS codes and declared values you use.
• Who approves the duty payment, and where the entry paperwork is filed.
• What happens if clearance stalls and storage charges start.

The container receiving checklist picks up from there, including what to do when customs has opened and resealed a container.

Inbound freight on DDP (the supplier clears it)

• What the quoted price includes, written into the PO.
• Which proof of clearance you keep, and where it is filed.
• Who to contact if goods are held at the border.

A DDP quote can still be the better deal. Our supplier onboarding SOP explains why a cheap EXW quote often loses once you pay for everything in between.

Outbound orders on DDP

• Which countries are set to DDP, and which to DAP.
• Which carrier account prints the label.
• Who checks for the Duties line before the label is bought.
• How the commercial invoice is marked.
• Who absorbs the brokerage fee.

Shopify also sets an audit step. When the first carrier invoice arrives, compare what checkout charged with what customs charged. Then repeat it on a schedule. Name the person and the month.

How does the SOP go stale when a broker or 3PL changes?

Quietly, and in a set order. The broker changes first. Then the login screen in the SOP's screenshots stops existing. Then the person who knew the workaround leaves, and the document still reads as if nothing happened.

Four events should force a re-check of a customs procedure:

1. A new broker, forwarder or 3PL takes over any part of clearance.
2. A carrier changes its DDP support for a country you sell into.
3. The duties charged at checkout and the carrier invoice stop agreeing.
4. A supplier moves you between DDP and DAP on a new PO.

None of these sends an email to your documentation. That gap between the process and the document is SOP drift. The failure to plan for is not a wrong definition of DDP. It is a correct definition attached to a broker you stopped using in March.

Next step

Pick one lane this week. Write down who signs the entry, who pays the duty, who pays the brokerage fee and which carrier account prints the label. Add the date you last checked it against a real invoice. That one page beats a general Incoterms explainer every time.

ReccordSOP turns a screen recording into a step-by-step SOP, with a screenshot for each step and the clicked button highlighted. Re-record the same task later and it compares the new recording with the existing SOP, flagging the steps that changed instead of overwriting them. It documents a process. It doesn't watch your store settings, so the invoice comparison still needs a person.

The free plan covers 3 SOPs in total. Team is $19 per user per month, with a 3-user minimum. Start with the label-printing step for your DDP orders: record it on reccordsop.com.