由 lltx1822 Unveiling the Truth: Differences of DDU, DDP, LCL, FCL and Their Impact on Trade
The four terms DDU, DDP, LCL, and FCL may seem simple, but they have far – reaching implications in international trade. Their differences are not only reflected in the definitions but also in the impact on the interests of both trading parties and the trade process.
From the perspective of costs, under DDU, the seller does not bear the import customs clearance and duty costs, which simplifies the seller’s pricing process. However, the buyer needs to estimate and prepare the relevant costs in advance; otherwise, they may face additional cost pressures. In contrast, under DDP, the seller needs to include all costs, such as duties and customs clearance fees, in the cost calculation. This poses a higher requirement for the seller’s cost – accounting ability but provides the buyer with a clear procurement cost.
Regarding risks, under DDU, the risk is borne by the seller before the goods are delivered to the buyer. Once the goods reach the specified location, the risk is transferred to the buyer. This requires the buyer to complete customs clearance promptly after the goods arrive to avoid additional storage costs and risks at the port of destination due to delays. DDP places the greatest risk on the seller. The risk is not transferred until the goods are cleared through import customs and delivered to the buyer. Any problems during this period, such as issues found during customs inspections or incorrect tax calculations, may cause losses to the seller.
LCL and FCL have a significant impact on the transportation risks and efficiency of goods. Due to the mixed loading of goods, LCL is prone to problems such as misloading, omitting loading, or damage to goods, and there are many uncertainties in the transportation time. FCL reduces the operation links of goods during transportation, greatly minimizing the risk of goods damage. Moreover, the transportation time is relatively stable, which is conducive to both trading parties in arranging production and sales plans. These differences directly influence the choice of terms by both trading parties and, in turn, the smooth progress of the entire trade activity.