DDP Shipping – How COVID-19 is changing how you should ship
May 20, 2020
As the world navigates the coronavirus outbreak, many stores are turning to contactless delivery, to help protect customers and delivery personnel by reducing transmission opportunities of the virus. Customer places an order, completes payment for all services online so there is no need to pay upon delivery and item is left at the door. This new method of delivery has been most prevalent in local grocery stores and restaurants, but did you know it also affects global e-commerce shipments.
While customers of domestic shipments from merchants are used to having their parcels left at their door, this is not always the case for international shipments.
Let’s take a quick review of the delivery options for global e-commerce merchants:
When ecommerce merchants start selling internationally, they must decide whether to offer DDU or DDP shipping
• DDP stands for “delivered duty paid” and means the consumer pays all cross-border customs duty, taxes and fees at checkout.
• DDU stands for “delivered duty unpaid” and means the customers pays all duties, taxes and fees upon shipments arrival at their door.
Many e-commerce merchants will begin by shipping DDU because who wants to deal with customs, duties and taxes? Sometimes easier to just push those responsibilities to the customer and not think about it, but in reality, out of sight does not mean out of mind. Shipping DDU even in regular times is not a great customer experience, but in our new environment due to COVID-19, it can be even worse.
With DDU shipping, you can imagine all the interactions between carrier and customer. Either the customer will have to interact with the carrier and pay at their door or will receive a notice they must go to a designated location to pick up their package and pay the customs and duties. Does not seem very contact free and could lead to issues in times of a global pandemic.
In the current environment where each country has fluid restrictions on movement and interactions, this can lead to a nightmare for merchants and customers shipping DDU. The inability to pay for customs and duties upon delivery can lead to packages being rejected or abandoned if payment is not collected. This ultimately leads to unhappy customers who are waiting for their package and a loss for merchants as the package may be rejected.
In addition, the global quarantine has caused delays in delivery times as cargo capacity is constrained due to fewer global flights. The impact has been especially hard for postal carriers who primarily ship DDU. While in best of times, DDU shipments are delayed due to the need to go through customs examination, this on top of pandemic induced delays has led to incredibly lengthy delivery times.
The good news is that there is a method to ship contactless and avoid this hassle and that is DDP Shipping.
FlavorCloud makes DDP shipping easy for ecommerce merchants by:
1. Calculating guaranteed duties, taxes and fees (Fully Landed Cost) at checkout that includes the cost of shipping, duty, local tax, and customs clearance.
2. Allowing customers to pay the amount at checkout, leading to a hassle free, contactless delivery
3. Automate customs processes for shipping and returns; generate labels, country specific customs paperwork and commercial invoices.
Shipping DDP and automating the calculation and payment of customs, duties and taxes lowers risks for both buyers and sellers. This statement is holds true during normal times but especially in a world where contactless delivery will become the new normal.
If you would like to learn more about DDP Shipping and how FlavorCloud can help , Contact Us for more information