DAP vs DDP: Which Incoterms Should You Use for International Shipping?

What Are Incoterms?

Incoterms (International Commercial Terms) are standardised trade terms published by the International Chamber of Commerce. They define the responsibilities of buyers and sellers in international transactions — specifically, who pays for shipping, insurance, and customs duties.

For courier shipments from Singapore, two Incoterms matter most: DAP and DDP.

DAP — Delivered At Place (Receiver Pays Duties)

Under DAP, the seller is responsible for delivering the goods to the destination address, but the buyer pays all import duties, taxes, and customs clearance fees.

In practice, this means:

• You (the sender) pay only the shipping cost
• FedEx clears customs on behalf of the receiver and advances the duty payment
• FedEx then collects duties from the receiver, often before releasing the package
• An additional "advancement fee" of S$20-30 may be charged by FedEx for this service

Best for: B2B shipments, shipments where the receiver expects to pay duties, markets with unpredictable duty rates.

DDP — Delivered Duty Paid (Sender Pays Duties)

Under DDP, the seller pays everything — shipping, customs duties, taxes, and clearance fees. The receiver gets the package with zero additional charges.

In practice:

• You must estimate or calculate import duties before shipping
• FedEx bills the duty amount to your account
• The receiver experiences a seamless, duty-free delivery

Best for: E-commerce orders (better customer experience), high-value items where you want to control the process, markets with predictable duty rates.

When to Use Each

• DAP for B2B: Business buyers typically understand and expect to pay import duties. They may also have their own customs broker or importer of record status.
• DDP for B2C: Consumers often don't expect extra charges on delivery. Surprise duty charges lead to refused deliveries and bad reviews.
• DAP for high-duty countries: When duties might exceed 20-30% of the goods value, DDP becomes risky because miscalculating means you absorb the difference.
• DDP for low-duty destinations: Countries like the US (under $800 threshold) or Australia (under AUD 1,000 for duties) make DDP low-risk.

Third-Party Billing

A third option exists: bill duties to a third-party FedEx account. This is common when the receiver has their own FedEx account and wants to control customs clearance. ShipAnywhere supports this — just enter the third-party account number when creating your shipment.