由 lltx1822 From Liability Allocation to Cost Bearing: A Comprehensive Comparison of 5 Key Trade Terms
Abstract
In international trade, five commonly used trade terms—DDP (Delivered Duty Paid), DAP (Delivered at Place), CIP (Carriage and Insurance Paid to), DFC (Delivered Freight Carriage), and COD (Cash on Delivery)—exhibit significant differences in liability allocation, cost bearing, and applicable scenarios. This article systematically compares these terms across five dimensions: transportation responsibility, customs clearance obligations, insurance coverage, tax liabilities, and risk transfer, incorporating the latest international trade trends for 2025 to provide a scientific selection strategy.
Key Questions Answered:
- DDP vs DAP: Who handles customs clearance? Who bears the taxes?
- CIP vs DAP: How does insurance coverage differ?
- Is DFC compliant? How to avoid contractual disputes?
- Which industries suit COD? How to mitigate rejection risks?
Target Audience:
- Supply chain managers in trading companies
- Logistics managers for cross-border e-commerce
- International trade legal advisors
1. Basic Definitions of the Five Trade Terms
1.1 Official Incoterms® (DDP, DAP, CIP)
| Term | Full Name | Seller’s Responsibility | Buyer’s Responsibility |
|---|---|---|---|
| DDP | Delivered Duty Paid | End-to-end shipping + customs clearance + tax payment | Only receive goods |
| DAP | Delivered at Place | Deliver to specified location (without unloading) | Customs clearance + tax payment |
| CIP | Carriage and Insurance Paid to | Pay freight + insurance to destination | Customs clearance + tax payment |
1.2 Non-Standard Terms (DFC, COD)
| Term | Common Interpretation | Applicable Scenarios | Risk Warning |
|---|---|---|---|
| DFC | Delivered Freight Carriage (industry-specific) | Freight collect, seller arranges shipping | Must be clearly defined in contracts |
| COD | Cash on Delivery | E-commerce, retail | High rejection risk |
2. Liability Comparison: Who Handles What?
2.1 Shipping Responsibility
- DDP: Seller handles door-to-door shipping (including last-mile delivery).
- DAP: Seller delivers to specified location (e.g., buyer’s warehouse gate).
- CIP: Seller pays freight to destination but may exclude final delivery.
- DFC: Seller arranges shipping, but freight may be paid by buyer (contract-dependent).
2.2 Customs Clearance Responsibility
| Term | Export Customs | Import Customs | Tax Liability |
|---|---|---|---|
| DDP | Seller | Seller | Seller |
| DAP | Seller | Buyer | Buyer |
| CIP | Seller | Buyer | Buyer |
Note: Under DDP, sellers must research destination tax rates (e.g., EU VAT, U.S. tariffs).
2.3 Insurance Responsibility
- CIP: Seller must purchase full-coverage insurance (110% of cargo value).
- DDP/DAP: Insurance negotiable (typically buyer’s responsibility).
3. Cost Structure Analysis: Which Saves More?
3.1 Typical Cost Components
| Cost Item | DDP | DAP | CIP | DFC |
|---|---|---|---|---|
| Int’l Freight | Seller | Seller | Seller | Seller/Buyer |
| Import Duties | Seller | Buyer | Buyer | Buyer |
| Insurance | Optional | Optional | Seller | Optional |
| Last-Mile Delivery | Seller | Buyer | Buyer | Buyer |
Case Study (China → U.S., $10,000 goods):
- DDP Total Cost: Freight $1,200 + Duties $800 = $2,000 (seller’s cost)
- DAP Total Cost: Freight $1,200 (seller) + Duties $800 (buyer) = Lower buyer cost
3.2 When to Choose DDP vs. DAP?
- DDP: High-value goods (e.g., luxury items), buyers lacking clearance capability.
- DAP: Bulk cargo, buyers familiar with import procedures.
4. Applicable Scenarios & Industry Cases
4.1 Typical DDP Applications
- Cross-border e-commerce (Amazon FBA inbound)
- High-value equipment (semiconductor tools, medical devices)
- Emerging markets (e.g., Middle East, Latin America with weak buyer clearance capacity)
4.2 CIP vs. DAP: Which Fits Electronics Best?
| Factor | CIP | DAP |
|---|---|---|
| Insurance | Full coverage (incl. transit risks) | Buyer-purchased |
| Cost | Higher (includes insurance) | Lower |
| Suitability | High-value fragile goods (e.g., chips) | Standard electronics |
4.3 COD’s Viability & Risks
- Best for: B2C e-commerce, small retail parcels (<50kg).
- Risks: 15–30% rejection rate (offset by 20% upfront deposits).
5. Risk Control & Contract Clauses
5.1 DDP Tax Risks
- Case: A firm exporting under DDP to the EU faced $50,000 in back taxes + fines due to VAT miscalculations.
- Solution:
- Engage local tax agents pre-shipment.
- Specify “seller covers only statutory duties, not local buyer taxes” in contracts.
5.2 DFC Contract Pitfalls
- Industry issue: Some forwarders mislabel “DFC” as “DDP excluding taxes,” causing disputes.
- Advice: Define “DFC = Delivered Freight Carriage, freight collect” explicitly.
6. 2025 International Trade Trends
6.1 Digital Customs
- DDP upgrade: Sellers can track duty payments via blockchain (e.g., Maersk TradeLens).
6.2 Sustainable Logistics
- CIP optimization: Low-carbon insurance (e.g., DHL GoGreen) cuts 5% off freight costs.