DDU Is Dying: Why Tariff Changes Have Sealed Its Fate 

The frustration of packages stuck in customs or surprise fees at delivery can sour even the most enthusiastic shopping experience. With recent changes in tariffs and customs clearance processes, these frustrations are only getting worse. Delivered Duty Unpaid (DDU) was once a cost-saving option, but as clearance requirements tighten, delays mount, and unexpected fees grow, it’s becoming clear: DDU is no longer a viable shipping method. 

What is DDP? And what is DDU? Here is quick refresh:  

• Delivered duties paid (DDP) means that all duties, taxes, and fees are paid by the merchant and collected at checkout. The seller is responsible for paying transportation costs, handling customs clearance and fees, and ensuring the order is delivered. 

• Delivered duties unpaid (DDU) means the buyer is responsible for paying the duties, taxes, and fees required for the shipment to clear customs. The buyer can refuse the delivery and then the burden is on the seller to return the shipment or have it destroyed in-country. 

The Death of DDU: What’s Changing? 

It’s no news that we love Delivered Duties Paid (DDP). Frankly, consumers love it even more than we do. In our last article about DDP and Delivered Duty Unpaid (DDU) shipping, we showed a clear preference for DDP shipping but it’s truer than ever with the recent trade wars.  For years, DDU allowed merchants to pass customs duties and taxes onto consumers. While this might have initially seemed like a cost-effective approach, it came with significant downsides—delivery refusals, customs holds, and hidden costs for the consumer that often led to poor customer experiences. Now, with recent tariff changes, those challenges have escalated. 

 Higher Fees, Higher Refusals 

Traditionally, about ~10% of DDU shipments were refused by customers or stuck at the border due to unexpected duties and taxes. With new tariffs increasing these costs significantly, that number is expected to rise even further. Customers faced with a hefty bill upon delivery are more likely to abandon their orders, leaving merchants to deal with costly returns, storage fees, or even abandoned shipments. 

Since Canada implemented tariffs on US Country of Origin goods in March, FlavorCloud has seen average landed costs on shipments contains Made in USA goods increase from CAD $21 to CAD $79. No buyer wants to be presented with a nearly $80 surprise bill at delivery.  

DDU No Longer Skips Customs Assessment 

Previously, many DDU shipments moved through postal channels under de minimis and Section 321 exemptions, bypassing rigorous customs assessments. However, new regulations when enacted mean most DDU shipments now must be processed through parcel clearance—subjecting them to full customs evaluations. This will mean increased scrutiny, more paperwork, and longer delays at the border. 

DDU Already Had Significant Delays—Now It’s Worse 

One of the primary reasons merchants stuck with DDU was cost. But even before the new changes, DDU shipments frequently experienced long hold times in customs due to missing or inaccurate information. Now, with additional compliance requirements, the likelihood of shipments getting stuck (and accumulating costly storage fees) grows exponentially. 

DDU vs. DDP: Why DDP is the Only Viable Choice 

Given these challenges, merchants must reconsider their international shipping strategy. Let’s break down how DDU and DDP compare in four key areas: 

1. Customs and Duties

Customs and duties are perhaps the most obvious categories to evaluate DDP and DDU—“duty” is in both of their names after all. It’s also one of the most important, with 21% of customers stating that shipping time and costs are the most important factor of online shopping. 

DDP: The merchant covers all duties, taxes, and fees upfront, ensuring transparent pricing at checkout and smooth customs clearance. At checkout, they can present the costs to the buyer and pass on costs upfront, but ultimately the merchant is responsible for the landed costs. With the right provider, shipments clear faster, reducing delays and improving the buyer experience. 

DDU: The consumer is responsible for duties and taxes upon delivery—often leading to sticker shock, refusals, and long delays in customs processing. 

🏆 Winner: DDP

Customer experience (CX) is crucial to any ecommerce business, and it’s simply a better experience for customers to know exactly what they’re paying up-front and to get goods on time. DDU has too much uncertainty and too many hidden costs to be a true contender in this space.  

While the lower initial shipping costs at checkout may make DDU appealing, your customers will thank you for not being hit with surprise delays or hidden costs upon delivery if you choose DDP. 

2. Buyer’s Risk and Responsibility

According to Statista, the top 5 reasons for cart abandonment when shopping online are: 

• Shipping costs were too expensive 

• Delivery time was too lengthy 

• The website’s authenticity wasn’t trusted 

• The website’s return policy was unclear 

• The true final cost (with duties and taxes) wasn’t listed at checkout 

The numbers don’t lie – customers don’t like risking it when shopping online. Instead, they want security, transparency, and, like all of us, not a lot of responsibility. 

DDP: The merchant assumes responsibility, preventing customers from dealing with customs complexities. This builds trust and removes friction from the purchase experience. 

DDU: The consumer is treated as the consignee, responsible for customs payments and resolving any clearance issues—resulting in higher refusal rates and a greater burden on customer support teams. 

Consumers buy more from merchants they trust.  Given no one likes surprise fees post-checkout and most consumers are ill-equipped to deal with customs, when merchants remove friction during the purchase experience they earn more checkouts and longer lifetime value from their consumers. 

🏆 Winner: DDP 

3. Buyer Experience

As mentioned earlier, the purchase experience is crucial. Zendesk says that over 50% of customers would switch to a competitor after just one bad experience. That’s higher odds than a coin toss. CX isn’t something you want to ignore, especially during the holidays when you’ll likely have an influx of first-time customers. 

DDP: No surprise costs, clear pricing, and a seamless shipping experience result in higher conversions and customer satisfaction. 

DDU: Surprise fees at delivery, long hold times, and poor transparency create a frustrating experience for customers and increase the likelihood of negative reviews or lost future sales. 

🏆 Winner: DDP 

With DDU being unpredictable and slower, DDP objectively offers a stronger buyer experience through no surprise costs, clear pricing, and speedier delivery. 

4. Delivery Times

While it’s always important for deliveries to arrive quickly and on time, having a predictable and accurate delivery timeframe is extra important over the holidays when there’s often a set deadline that customers are working towards. 

With that in mind, let’s take a look at how delivery times are impacted by your choice of DDP or DDU.! 

DDP: With duties pre-paid and fast-track customs clearance, shipments move quickly and predictably. 

DDU: Increased customs holds and unpredictable delays mean customers have no guarantee of when their package will arrive. 

🏆 Winner: DDP 

With the comfort and predictability it provides regarding delivery times, DDP is the best option for your customers and a way to let them feel safe buying from you. 

The Final Verdict: DDU is No Longer a Sustainable Choice 

The writing is on the wall—DDU is no longer a viable shipping method. With increasing refusals, more customs scrutiny, mounting delays, and escalating costs, merchants who rely on DDU expose themselves to significant risk. 

DDP, on the other hand, offers a seamless, predictable, and cost-effective alternative. By removing friction from the international shopping experience, merchants can increase conversions, reduce delivery issues, and build long-term customer trust. 

Stay Ahead with FlavorCloud’s DDP Solution 

The future of international shipping is clear: DDP is the only way forward. At FlavorCloud, we specialize in seamless DDP solutions that ensure fast customs clearance, transparent pricing, and an optimized global shipping experience. 

Don’t let outdated shipping methods hold your business back. Want to learn more about how FlavorCloud powers seamless, fast-pass customs clearance and guaranteed DDP?  One of our global support specialists would be happy to help you – Connect with us today!