CIP vs DDP: who pays what

CIP is Carriage and Insurance Paid To. DDP is Delivered Duty Paid. Incoterms 2020.

The difference that matters

Full cost split

Cost blockCIPDDP
Export clearanceSellerSeller
Carriage to port / terminalSellerSeller
Loading onto main carriageSellerSeller
Main carriage (freight)SellerSeller
InsuranceSellerNeither obliged
Unloading at destinationBuyerBuyer
Import clearanceBuyerSeller
Duties and import taxesBuyerSeller
Risk passesWhen the goods are handed to the first carrier — same as CPT.At the named destination, ready for unloading, after import clearance.
Transport modeAny modeAny mode

What people get wrong

CIP

The 2020 revision raised CIP cover above CIF’s. Contracts copied from pre-2020 templates often still assume they match.

DDP

Many countries will not let a non-resident seller act as importer of record, and unrecoverable import VAT quietly becomes a cost.

Questions

What is the main difference between CIP and DDP?
They split 3 cost blocks differently. insurance falls to the seller under CIP and the none under DDP; import clearance falls to the buyer under CIP and the seller under DDP; duties and import taxes falls to the buyer under CIP and the seller under DDP.
Where does risk pass under CIP?
When the goods are handed to the first carrier — same as CPT.
Where does risk pass under DDP?
At the named destination, ready for unloading, after import clearance.
Can CIP and DDP both be used for container shipments?
Yes. Both work for any mode of transport, including containers, air and road.

Whichever term you agree, the paperwork has to say so

The Incoterm and named place belong on the commercial invoice, the packing list and the shipper's instructions — spelled the same way on each. ovrseas generates the set from one entry so they cannot disagree with each other.

Commercial invoice template

Compare other pairs

CFR vs CIPCFR vs DDPCIF vs CIPCIF vs DDPCIP vs CPTCIP vs DAPCIP vs DPUCIP vs EXW

Incoterms® is a registered trademark of the International Chamber of Commerce. This page is an independent summary of how costs and risk are allocated and is not affiliated with or endorsed by ICC. For contract drafting, use the official Incoterms® 2020 rules published by ICC.