Discover the benefits of DDP shipping vs FOB shipping
Supply chain and logistics go hand in hand with sourcing and they are a part of sourcing that you need to have a clear plan for. If you do not have the resources in-house to ensure the safe transportation of your goods, freight can be a big hurdle to overcome. Therefore, we have created this short guide to shipping methods, so you can get a quick overview of what method best suits your business.
In the following, we will give an introduction to DDP shipping and FOB shipping, which are two of the most commonly used shipping methods in international trade.
What is FOB shipping?
FOB shipping stands for Free On Board, which means that the buyer bears all costs associated with the transportation of the goods from the seller’s location to their destination. It also means that all costs up to the point of loading onto a ship are paid by the seller.
The buyer is then responsible for all charges after this point, including freight, insurance, and customs clearance fees, as well as duties and taxes. It is important to note that FOB agreements do not cover any risks or responsibilities related to cargo damage while in transit.
What is DDP shipping?
DDP stands for Delivered Duty Paid, which means that the seller pays all costs associated with the transportation of goods from their location to the buyer’s destination. Including customs duties, taxes, and transportation costs. DDP shipping simplifies the process for both parties involved.
With DDP, you can source your goods and get them transported home hassle-free. As the seller is responsible for all documentation besides obtaining
any documentation for export or import clearances, you can focus on other parts of your supply chain. With DDP agreements, however, it is important to note that the buyer is still responsible for any additional costs associated with unloading and storing the goods unless other agreements have been made.
Should you use DDP shipping or FOB shipping?
For those looking for a simpler solution with minimal risk, DDP may be the best option as all costs are taken care of before delivery; however, for those looking to save money, FOB may be more suitable as the buyer will pay all associated costs.
At Dymak, we know how important it is to be able to understand and navigate these two terms when sourcing and shipping internationally. We have an experienced international team of logistic experts that help our customers’ goods get safely from the sourcing country to our customers’ warehouses—limiting wasted time and frustration.
Our team of international logistic experts ensures and keeps you updated on all inspection rapports and costs, formalities and duties, invoices, and proof of delivery, among others. We combine logistics and supply chain management in our internal systems, allowing our customers to draw all necessary documents when and wherever they want them.
We hope this has been a helpful overview of DDP shipping and FOB shipping for international trade. If you have any questions or would like more information, please don’t hesitate to contact us.
We look forward to helping your business succeed!
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