If you ship to Canada using USPS, you can prepay customs on behalf of your customers—thus creating a smoother customer experience. Replace surprise charges or returned goods with increased customer satisfaction. The services that now allow you to prepay customs are USPS First Class Mail International® (FCMI), USPS Priority Mail International® (PMI), or USPS Priority Mail Express International® (PMEI). Shippers wanting to use USPS have historically not had this option. However, ShipEngine now provides you with the option to create a Delivered Duty Paid (DDP) shipment.
What is DDP?
When you ship products internationally, each country has its own set of customs regulations and duty/tax rates. Customs fees are then applied to the imported items depending on the items and their commodity being imported. Delivered Duties Paid (DDP) is the international trade term for a shipment whose seller has assumed/paid the total costs for delivering the goods to the destination.
While DDP has been a feature available through carriers like UPS and FedEx for some time, the USPS has historically not offered it. Keep in mind that this is only a feature available for parcels headed to Canada. ShipEngine provides DDP to Canada through the Global Advantage Program. The Global Advantage Program (GAP) is an international shipping program that allows you to take advantage of the trusted USPS delivery network while benefiting from the discounts and ease of use provided by GlobalPost. Without this program, USPS shipments to Canada would require the customer to pay customs charges.
The opposite of DDP is Delivered Duty Unpaid (DDU). This is when the recipient is responsible for paying the amassed tax/duty amount that customs officials may have assessed. This can create friction if a customer doesn’t realize they have to pay extra when their parcel is delivered. Because international shipping already carries a higher cost than its domestic counterpart, additional charges may cause a customer to not accept the parcel. This can lead them to reject the shipment, resulting in either returned merchandise or abandoning the shipment. Both of these options can be quite costly.
Benefits of DDP
With DDP, the shipper is responsible for paying tax and duties on behalf of the customer, eliminating surprise fees at delivery time for the customer. This allows you to front the costs associated with international shipments and charge shipping fees upfront. With ShipEngine, these costs aren’t always going to range dramatically—particularly when sending to our neighbor to the north.
How Much Does USPS DDP to Canada Cost?
When you create a DDP shipment with the USPS headed to Canada, you will be charged a flat fee to pay duties or taxes in advance. The fee is determined by the USPS international service you select:
- USPS First Class Mail International®: $9.95
- USPS Priority Mail International® and Priority Mail Express International®: $9.95
Additionally, a DDU shipment can accrue additional charges that DDP eliminates. If Canadian duties and taxes are assessed by customs and DDP was not included, Canada Post collects the fees upon delivery, plus an additional $9.95 surcharge. That extra surcharge could end up being a large percentage of the overall product cost, cutting further into the seller’s margin. DDP eliminates the $9.95 Surcharge. Keep in mind, though, that parcels you send using Canada DDP have a maximum value that cannot exceed $400.
How to Apply Canada DDP to Shipments in ShipEngine
In ShipEngine, DDP is specified in your Create Label requests as an Advanced Option. The flat fee will display in the other_amount field of the rate response. To access the full documentation on configuring international shipments read ShipEngine’s international shipping documentation
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