Certified Supply Chain Professional (CSCP) Practice Exam

Which term indicates that the seller delivers goods at destination without any additional costs to the buyer?

1. Delivered at Terminal

2. Delivered Duty Paid

3. Cost and Freight

4. Freight on Board

The correct answer is: Delivered Duty Paid

The term "Delivered Duty Paid" (DDP) is a key concept in international trade and logistics, indicating that the seller assumes full responsibility for the delivery of goods to a specified destination. This includes not only the transportation costs but also any duties, taxes, and tariffs that may apply. In this arrangement, the seller ensures that the goods are cleared for import and that all associated expenses are covered, relieving the buyer of any additional financial burdens upon delivery. This term is significant because it provides a clear understanding of liability and cost responsibility in a transaction. The seller takes on all risks and costs until the goods are delivered to the buyer's location, making it a favorable option for buyers who prefer to have a predictable expense structure without unexpected costs upon receipt. In contrast, the other terms mentioned refer to different shipping arrangements. "Delivered at Terminal" involves delivery to a terminal rather than directly to the buyer’s location, which may lead to the buyer incurring additional costs. "Cost and Freight" incorporates shipping costs but does not include insurance or unloading; the buyer might still be responsible for certain risks and expenses once the goods are on board. Lastly, "Freight on Board" specifies that the seller's responsibility ends once the goods are on the transport vessel