What a DDP Price Actually Includes

Two casting quotations land on your desk. One reads £3.80 per part, ex-works from a foundry overseas. The other reads £4.40 per part, delivered to your factory. Which is cheaper? On the evidence given, you do not know. One of those numbers is a finished cost and the other is the start of a series of invoices. This article explains what a DDP price contains, what an ex-works price leaves out, and how to put competing casting quotes on a comparable basis.

What DDP means

DDP, Delivered Duty Paid, is one of the eleven delivery terms defined by Incoterms 2020. Under DDP the supplier delivers the goods to a named place, normally your works, cleared for import with duty paid. Cost and risk sit with the supplier for the whole journey. Of all the Incoterms it places the maximum obligation on the seller and the minimum on the buyer, which is exactly why we quote it as standard: the number on the quotation is the landed cost.

What is inside a DDP price

When we quote DDP to your works, the unit price already contains everything between the foundry and your goods-in:

• Export packing and export clearance at origin
• Freight, sea as standard, air where the deadline demands it
• Cargo insurance for the journey
• Port and terminal handling at both ends
• Import customs entry and clearance
• Import duty at the rate for the part's commodity code
• Inland haulage to your site

Nothing arrives later from a freight forwarder, a customs broker or a haulier. If any of those costs move between quotation and delivery, that is our problem, not yours.

Why ex-works prices look cheaper than they are

An ex-works price from an overseas foundry leaves every one of those items out, and an FOB price still leaves out everything after the goods are loaded at the origin port: freight, insurance, arrival-side handling, customs entry, duty and final delivery. Those costs do not disappear: they get added afterwards, by different parties, at rates you discover one invoice at a time. Freight rates move with the season and the market. Terminal handling, broker fees and deferment charges are small individually and meaningful in total. And someone in your business has to become the importer: registering for an EORI number, classifying the parts under the right commodity code, arranging customs entries and accounting for import VAT.

None of that is impossible, and larger buyers with established import operations do it every day. But it is real cost and real work, and it belongs in the comparison. A fair comparison converts every quotation to the cost of the part sitting at your goods-in. A DDP quotation already is that number.

Risk stays with the supplier

Price is only half of the term. Under DDP the risk of the journey also sits with the supplier: transit damage, a delayed vessel, a customs query, a rolled container. Responsibility for resolving them, and for the insurance claim if it comes to that, sits on our side of the contract. Your exposure starts where it should: inspecting the parts at goods-in against the delivery note and the certification pack.

What lands on your desk

For UK customers the experience is simple: you buy from a UK company and receive a UK invoice. There is no customs paperwork on your side, no broker relationship to manage and no import VAT mechanics to run. The parts arrive booked in like any domestic delivery, accompanied by the delivery note and the material certification you specified. We deliver DDP to customer works in the EU as well, with invoicing and VAT treatment agreed at quotation.

For budgeting, the practical effect is simple: the quoted price is the price. Purchasing can compare it directly against a domestic supplier's delivered price, because both numbers now mean the same thing.

When DDP is not the right term

DDP is our standard, not a rule. Some buyers run their own freight programmes, consolidate shipments from several suppliers, or hold customs authorisations that make self-importing efficient. If that is you, say so in the RFQ and we will quote the Incoterm that fits, with the quotation stating clearly which costs transfer to your side.

Comparing casting quotes fairly

Whatever the delivery term, the comparison discipline is the same:

• Convert every quotation to landed cost at your goods-in, or ask for DDP so the supplier does it for you
• Check that tooling is a separate, one-off line, so unit prices compare like for like
• Confirm the certification and testing scope is inside the price, not an extra

Our guide to what to include in a casting RFQ covers the delivery term as one of the seven things every enquiry should specify.