Because suppliers need to be experts in customs clearance, VAT or import duties in the destination country, there is a lot of room for error. Even if the supplier is confident that their local freight forwarder can help, the buyer cannot verify that the local forwarder is qualified to handle the delivery accordingly. When freight forwarders lack qualifications, mistakes can quickly lead to disaster and the cost of fixing them continues to mount. The scary thing buyers need to consider is the extent to which their suppliers are willing to correct the problem before they give up and abandon the goods.
While this may be a huge loss for them, it is also a huge loss for the buyer, as there is inevitably a deposit to be paid for the product and a lot of time is spent in production and shipping.
When sellers are in charge of shipping, it is in their own financial interest to find the cheapest option. Like most industries, you get what you pay for. If the supplier goes for the cheapest and least reliable option, the likelihood of problems such as lost or damaged goods is multiplied. While this ends up costing suppliers more, they are usually willing to take the risk because the more they can save, the more profit they make.
When sellers are in charge of shipping, they almost always choose the slowest option because it's the cheapest for them. DDP Incoterms eliminates the opportunity for the buyer to control the delivery time, or to identify an expedited delivery process if needed. Therefore, delays are inevitable. Experienced buyers know they can often reduce delays by opting for faster shipping times. While most buyers like to plan for slower, cheaper options, they often hold onto faster, more expensive shipping options as a backup plan. When shipping via DDP, this opportunity is usually lost because the buyer has no control over how the goods are shipped.
In the case of shipping delays, buyers usually have to communicate with sellers if they want to help correct any problems. Because sellers are often in different time zones from buyers, this slows down communication and can lead to delays longer than buyers would be able to communicate directly with local shipping agents.
In the process of transportation, the seller always works against the buyer. When the product is in production, the seller wants to do enough work for the buyer to accept the product. Sellers are financially incentivized to try to please buyers. During shipping, the seller no longer needs to satisfy the buyer because they have already agreed to purchase the product. Any shipping problems or delays may shift the responsibility to the shipping company, and the seller can also play the role of victim.
In fact, the delay occurred when Incoterms is DDP can be attributed to the seller choosing the wrong logistics company to deliver the goods. Most of the time, the seller can solve the problem by paying more. Since the buyer has already accepted the product and the seller only has to fulfill the contract, they have little interest in reducing their profit margin to satisfy the buyer. The seller already knows that the buyer will pay for the product whenever it is delivered.
DDP usually costs more than the buyer to cover shipping costs. The reason for this is because the buyer has no control over the purchase price and the seller needs to factor all possible additional costs into their selling price, whether they incur those costs or not. When buying through DDP terms, the buyer undoubtedly pays the highest possible freight every time.
DDPFORWORLD- Professional China international freight forwarder
DDP shipping remains one of the most popular modes of transportation for international businesses as it is popular with buyers. They take less risk until the product is delivered, so it's in their best interest. However, if there are too many problems, the costs associated with the seller's DDP can make it unprofitable.
DDP for World is a full-service and shipping forwarder dedicated to assisting our clients in focusing and growing their businesses. We do DDP shipping since 2015 by handling home décor, Pet products, battery, power banks, DG cargo, general cargo and Amazon FBA forwarding service. We make your shipping easier and faster by Sea, Air, Express, Truck or Railway. If you run an e-commerce business and want to find a trusted company to provide DDP services to work with, please contact us.
Phone: +86 18682082113
Wechat/Whatsapp: +86 18682082113
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