DDP vs DAP: Which Incoterm Should You Use Shipping From Miami to Latin America?

Two Incoterms, one letter apart, and the difference decides who is legally on the hook for customs duty, taxes and clearance in a foreign country. For Miami exporters selling into Latin America, getting this wrong is not a paperwork inconvenience – it is a shipment sitting at a port with nobody authorised to clear it.

The plain-language difference

DAP – Delivered at Place. You deliver the goods to the named destination, ready for unloading. The buyer handles import clearance and pays all duties and taxes. Your responsibility ends at the door; theirs begins with the customs entry.

DDP – Delivered Duty Paid. You deliver the goods to the named destination and you clear them through the destination country’s customs and pay all import duties and taxes. DDP is the maximum obligation an Incoterm can place on a seller.

Everything else – who books freight, who insures, who bears risk in transit – is the same. Both are delivered terms, so risk transfers at destination in both cases. The single difference is who owns import clearance and the duty bill.

The trap that catches most US sellers

Here is what the Incoterms rules do not spell out clearly enough: in many Latin American countries, a foreign company cannot act as importer of record.

To file a customs entry in Brazil, Argentina, Colombia, Mexico and several others, the importer must have a local tax registration and, in some cases, a specific import licence or registry entry. A Miami company with no local legal presence often cannot legally be the importer.

So when you agree to DDP, one of three things happens:

1. You use a third party who agrees to import in their own name – which creates real liability for them, costs money, and is not always available.
2. Your buyer imports it anyway and you reimburse the duty – which is DAP with extra steps and no legal protection.
3. The shipment gets stuck because nobody can file the entry.

The third outcome is more common than you would think, and it usually surfaces after the vessel has arrived and free time is burning.

When DAP is the right call

DAP is the default recommendation for most Miami exporters selling into Latin America, because:

• Your buyer almost certainly already has the tax registration, the customs broker and the local knowledge.
• Local duty rates, valuation practices and reference prices are opaque from Miami. Your buyer knows what their customs authority will actually assess.
• You are not exposed to a duty bill you cannot accurately forecast.
• If the shipment gets flagged for valuation review or an inspection, your buyer is the one with standing to respond.

The commercial objection is that DAP feels less customer-friendly. In practice, most experienced LATAM buyers prefer DAP because they have negotiated duty positions, deferral arrangements or free-zone options you cannot access.

When DDP genuinely makes sense

• You have a legal entity or registered branch in the destination country. Then you can be the importer, and DDP is simply a service you are selling.
• Small e-commerce parcels under de minimis thresholds, where a courier handles clearance under a simplified regime.
• You are shipping to your own subsidiary or distributor and controlling the whole chain anyway.
• Your buyer is genuinely inexperienced and you have priced the risk properly – meaning you have a quoted duty figure from a local broker in writing, not an estimate.

What to nail down before you quote either term

Classify the goods first. The HS code drives the duty rate. Get it right before you price, not after. Our guide to HS code mistakes that cost Florida importers applies just as much on the export side.

Check trade agreement eligibility. CAFTA-DR, USMCA and various bilateral agreements can take duty to zero on qualifying US-origin goods – but only with a valid certification of origin. That changes the DDP math completely.

Name the exact place. “DAP Bogota” is ambiguous. “DAP [street address], Bogota, Incoterms 2020” is not. Delivered terms require a named place, and the named place is where risk transfers.

Confirm VAT treatment. Most Latin American countries charge VAT or IVA on imports at rates that dwarf the duty. Under DDP, that is your bill. Under DAP, your buyer usually recovers it as input tax – which is a genuine reason DAP is often cheaper for everyone.

Getting the Miami side right

Whichever term you use, the export leg is yours. That means correct AES and EEI filing where required, ISPM 15 compliant wood packaging, accurate commercial documents, and cargo that is packed to survive the trip. For a broader look at how Incoterms interact with Florida import and export operations, see our Incoterms guide for Miami importers.

If you are exporting out of South Florida and want the consolidation, crating and documentation handled in one place, request a quote.

Frequently asked questions

What is the difference between DDP and DAP?

Under DAP (Delivered at Place), the seller delivers to the named destination and the buyer handles import clearance and pays all duties and taxes. Under DDP (Delivered Duty Paid), the seller does all of that plus clears customs and pays the import duties and taxes. Risk transfers at the named destination under both terms.

Can a US company ship DDP to Latin America?

Often not directly. Many Latin American countries require the importer of record to hold a local tax registration, and some require an import licence or registry entry that a foreign company cannot obtain. Before agreeing to DDP, confirm in writing that either you have a local entity or a third party will legally act as importer of record.

Is DDP or DAP cheaper for the buyer?

DAP is usually cheaper in total, even though the buyer pays the duty. Buyers can typically recover import VAT as input tax, may have negotiated duty positions or free-zone options, and avoid paying a seller’s markup on clearance services. DDP shifts work to the seller but rarely lowers the total landed cost.

Get a freight quote

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Request a freight quote or call (786) 445-0150.