FCA Incoterm (Free Carrier) Explained: A UK Guide
09/07/2026
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What is FCA? FCA, Free Carrier, is an Incoterm where the seller delivers goods to a carrier nominated by the buyer, at a named place.
What is DDU?
DDU, Delivered Duty Unpaid, was an Incoterm under the Incoterms 2000 rules. The seller delivered goods to a named destination and bore all transport costs and risk during transit. The buyer was responsible for import customs clearance, import duties, and taxes on arrival. DDU was abolished in Incoterms 2010 and replaced by DAP (Delivered at Place), which works in the same way. If a supplier has quoted you DDU terms today, treat it as DAP, the responsibilities are identical.
If you have received a quote with “DDU” on it and you are not sure what you are agreeing to, you are in the right place.
DDU is a retired Incoterm. It no longer appears in the official ICC rulebook. But suppliers still use the abbreviation, and the term still shows up on quotes, contracts, and commercial invoices. So understanding it matters, not because it is official, but because it still shows up in real shipments.
This article explains what DDU meant under Incoterms 2000, what replaced it, and what you should do if you see it on a quote today. If you are worried you have accepted DDU terms without understanding what they mean, read on. The responsibilities are clear once you know the rules.
DDU stands for Delivered Duty Unpaid. It was one of 13 Incoterms under the Incoterms 2000 rules, published by the International Chamber of Commerce (ICC).
Under DDU, the seller:
And the buyer:
The key word is “unpaid.” The duty is unpaid by the seller, it is the buyer’s job to pay it. The seller does everything else, right up to arrival at the named destination.
The opposite of DDU was DDP, Delivered Duty Paid, where the seller handled both delivery and all import costs. Under DDU, the seller stopped at the border (in terms of customs responsibility). Under DDP, the seller went the full distance.
DDU was commonly used for air freight, road freight, and sea freight shipments. It was particularly popular in trade between European countries and for imports into the UK from Asia and North America.
Here is the full sequence of events under a DDU shipment.
1. Contract agreed. Seller and buyer agreed on DDU terms and named a specific place of destination: for example, “DDU Buyer’s Warehouse, Manchester M1 1AB.” The named place determined how far the seller’s obligation extended.
2. Seller packed and prepared goods. The seller packed the goods and arranged all origin-side logistics. Inland haulage to port, port handling, and loading were the seller’s cost and responsibility.
3. Seller handled export customs clearance. The seller filed export declarations and cleared the goods through customs in the export country. Any export duties or taxes were the seller’s problem.
4. Seller arranged and paid for main carriage. The seller contracted and paid for freight to the named destination. This covered the full journey, from origin port to the destination named in the contract.
5. Goods arrived at the named place. The seller’s transport brought the goods to the agreed location, typically the buyer’s warehouse or a freight terminal named in the contract. The goods were placed at the buyer’s disposal, ready for unloading.
6. Risk transferred to the buyer. At the moment the goods arrived at the named place ready for unloading, risk passed from seller to buyer. Any damage or loss during transit was the seller’s liability up to that point.
7. Buyer unloaded the goods. Unloading was the buyer’s cost and responsibility. The seller delivered to the named place, not into it.
8. Buyer handled import customs clearance. Import clearance was entirely the buyer’s job. The buyer appointed a customs broker, filed the import declaration, and paid all import duties and taxes.
| Responsibility | Seller | Buyer |
|---|---|---|
| Packing and labelling | Yes | No |
| Origin haulage to port or airport | Yes | No |
| Export customs clearance | Yes | No |
| Export duties and taxes | Yes | No |
| Loading at origin port or terminal | Yes | No |
| Main carriage to named destination | Yes | No |
| Cargo insurance during transit | No obligation | Recommended |
| Risk of loss or damage in transit | Until goods arrive at named destination | From goods arriving at named destination |
| Unloading at destination | No | Yes |
| Import customs clearance | No | Yes |
| Import duties and import taxes | No | Yes |
| Import VAT | No | Yes |
| Last-mile delivery beyond named place | No | Yes |
The clearest way to remember DDU: the seller delivered to the door, but the buyer dealt with customs, duty, and unloading. Everything up to the destination was the seller’s problem. Everything at and after the destination was the buyer’s.
A DDU price from a supplier covered a specific set of costs. Understanding what was in and out of that price is how you avoid unexpected bills.
What the seller’s DDU price included:
What the buyer paid separately:
A worked example.
A UK retailer imported 200 units of power tools from a supplier in Guangzhou, China on DDU Birmingham Warehouse, Incoterms 2000 terms. The goods were invoiced at £18,000.
The supplier’s DDU price covered everything from the Guangzhou factory to the Birmingham warehouse gate. The buyer then paid separately: customs broker fees (around £180), UK import duty on power tools (typically 1.7% = £306), and UK import VAT at 20% (on goods value plus duty = around £3,661).
Those costs were not in the DDU price. They were the buyer’s own obligation, separate from whatever they paid the supplier.
Under DDU, risk passed from seller to buyer when the goods arrived at the named place of destination and were placed at the buyer’s disposal, ready for unloading.
This was one of the latest risk transfer points in the Incoterms 2000 suite. The seller carried the risk for the entire outward journey, from factory floor to destination gate. If goods were damaged at sea, in a warehouse fire, or during road transit, it was the seller’s liability, not the buyer’s.
This made DDU attractive to buyers. If something went wrong on the way, the seller was responsible for putting it right.
What it meant in practice.
A Leeds-based importer bought machine parts from a supplier in Germany on DDU Leeds Warehouse terms. The consignment crossed the Channel via Dover and was involved in a road traffic incident in the Midlands. Several components were damaged.
Because the goods had not yet arrived at the Leeds warehouse ready for unloading, risk had not transferred. The seller bore the loss and was responsible for replacement or compensation. Only once the delivery truck arrived at the Leeds warehouse gate, and the goods were ready to be unloaded, did risk pass to the buyer.
Any damage discovered after that point was the buyer’s problem. Timing of the transfer mattered enormously in any dispute.
DDU imposed no obligation on either party to take out cargo insurance. The ICC rules did not require it, insurance was an optional commercial decision.
In practice, however, insurance was essential.
For the seller: they carried risk from factory to destination. If goods were lost or damaged in transit, they were financially exposed. Most sellers using DDU took out marine cargo insurance or all-risks transit insurance to protect that exposure.
For the buyer: once risk transferred at the destination, the buyer was exposed. If goods arrived and were damaged during unloading or in their warehouse, they had no claim on the seller. The buyer needed their own cover from the point of delivery onwards.
The safest approach under DDU was for both parties to ensure continuity of insurance across the handover point. A gap, where neither party was insured at the moment of delivery, left both sides exposed in the event of a disputed claim.
For UK importers, cargo insurance could typically be arranged through a freight forwarder or directly with a marine insurer. Premiums varied by commodity, route, and declared value. A shipment of £20,000 of consumer electronics from China might carry an insurance premium of between £80 and £250 depending on the insurer and cover level.
Control over freight costs and logistics. The seller arranged the main carriage, so they could negotiate their own rates and use their preferred carriers. This often meant lower freight costs than buyers could achieve independently, particularly for sellers with high shipping volumes.
No involvement in import customs. Import clearance was the buyer’s problem entirely. The seller had no responsibility for duty rates, commodity codes, or import declarations in the destination country. This reduced complexity for exporters shipping to multiple markets.
Stronger price competitiveness. DDU allowed sellers to offer a delivered price that was genuinely competitive, the buyer only had to add local duties and taxes. For buyers comparing suppliers, a DDU price was easier to compare than an EXW or FOB price, where the buyer had to build in their own freight estimates.
Better customer experience than EXW or FOB. Buyers who did not want to arrange their own shipping appreciated a seller who managed transport. DDU was a strong selling point for suppliers trying to win business from buyers who lacked freight expertise.
Minimal transit risk. The seller carried risk all the way to the destination. As a buyer, you did not have to worry about loss or damage in transit, that was the seller’s liability until the goods arrived at your door.
No need to arrange or pay for main freight. The seller handled shipping. The buyer did not need to negotiate freight rates, manage shipping lines, or deal with origin-side logistics. This was particularly useful for buyers who were new to importing.
Control over import customs. The buyer handled their own import clearance. This meant they could choose their own customs broker, use their own EORI number, and manage their own relationship with HMRC. Buyers who preferred to control their duty classification and import entries used DDU for exactly this reason.
Transparency on duty costs. Because the buyer handled import customs, they knew exactly what they were paying in duty and VAT. There was no markup from the seller on those costs: unlike DDP, where sellers sometimes added a margin to cover the risk of import unknowns.
Long transit risk exposure. The seller carried risk for the entire journey, sometimes weeks or months of transit, depending on the origin. A sea freight shipment from China to the UK might take 28 to 35 days. The seller was on the hook throughout.
Delivery delays outside their control. If the buyer delayed import clearance, failing to provide documents, being slow to appoint a broker, or simply being disorganised, the seller could face storage or demurrage costs at the destination port or terminal. Under DDU, the seller was still responsible for delivering to the named place, even if the delay was the buyer’s fault.
Complexity in multi-country shipments. DDU required the seller to arrange transport across different regulatory environments. A seller in China shipping to the UK had to navigate Chinese export regulations and a UK destination, while also managing a carrier operating across both. Mistakes were costly.
No guarantee of duty compliance. The buyer handled import clearance. If the buyer misclassified goods or failed to pay the correct duty, the seller was not involved. But reputational damage could still occur if a shipment was held at the UK border because the buyer had incorrect documentation.
Customs clearance responsibility is not simple. UK import clearance requires a UK EORI number, a commodity code, a correct customs value, and a declaration filed through the UK Customs Declaration Service (CDS). If you are new to importing, this can be complex and error-prone.
Unexpected duty bills. If a buyer had not properly calculated the import duty rate for their goods, the bill on arrival could come as a surprise. A shipment of goods worth £30,000 in a category carrying 12% duty means £3,600 in duty, on top of whatever was paid for the goods.
Storage costs if clearance is delayed. If the buyer could not clear the goods quickly, missing documents, incorrect EORI number, disputes with HMRC, goods could sit in a bonded warehouse or port facility. Storage fees at Felixstowe or Southampton could run to £100–£300 per container per day.
No seller involvement if something goes wrong at destination. Once goods arrived at the named place, risk transferred. If unloading caused damage, or if goods were found to be faulty on delivery, the liability question moved into more complex territory. The seller’s obligation had ended; the buyer had to pursue claims through other routes.
In 2010, the ICC published the Incoterms 2010 rules, a full revision of the framework. DDU was one of the terms abolished in that revision. It was not amended or updated, it was removed entirely.
The ICC’s reasons were practical. The 2010 revision reduced the number of Incoterms from 13 to 11, cutting terms that were either redundant or confusing.
DDU was replaced by DAP, Delivered at Place. DAP covers the same ground: the seller delivers to a named destination, the buyer handles import clearance and duty. The practical mechanics are identical. The only real change was the name.
The ICC also introduced DPU, Delivered at Place Unloaded, as a separate term for situations where the seller was responsible for unloading. Under the old Incoterms 2000 rules, a similar concept existed through DAT (Delivered at Terminal). DPU broadened that to cover any named place, not just a terminal.
The other terms abolished in 2010 included DAF (Delivered at Frontier), DES (Delivered Ex Ship), and DEQ (Delivered Ex Quay). All four were removed in favour of cleaner, more universally applicable terms.
The change also aimed to reduce ambiguity. DDU’s name focused attention on the duty question, when in practice the bigger commercial issue was often the delivery point and risk transfer. DAP shifted the framing to the delivery place itself, which the ICC felt was clearer for traders.
The honest answer: almost nothing changed in terms of commercial obligations. DAP replaced DDU with different wording and a clearer name, but the fundamental responsibilities are the same.
| Element | DDU (Incoterms 2000) | DAP (Incoterms 2010/2020) |
|---|---|---|
| Seller’s delivery obligation | To named destination | To named place of destination |
| Risk transfer point | On arrival at named destination, ready for unloading | On arrival at named place, ready for unloading |
| Seller handles export customs | Yes | Yes |
| Buyer handles import customs | Yes | Yes |
| Import duty | Buyer pays | Buyer pays |
| Import VAT | Buyer pays | Buyer pays |
| Unloading | Buyer’s responsibility | Buyer’s responsibility |
| Insurance obligation | Neither party required | Neither party required |
| Valid transport modes | All modes | All modes |
| Current ICC status | Abolished (2010) | Active (Incoterms 2020) |
If someone quotes you DDU terms today, the commercial obligations they are describing are essentially those of DAP. Treat the quote as DAP, confirm with the supplier which Incoterms edition they intend, and proceed on that basis.
If a supplier has sent you a quote with “DDU” on it in 2025 or 2026, do not panic. It is a common occurrence.
DDU was in use for many years. Suppliers, particularly those in countries where Incoterms education is less formal, such as parts of Asia, the Middle East, and South America, sometimes use DDU out of habit. Older contract templates still carry it. Some freight platforms and ERP systems have not been updated and still list DDU as an option.
What DDU means in practice on a modern quote:
The supplier is almost certainly describing what we now call DAP. They are telling you:
What you should do:
The most important thing: DDU is not a fraud or an error. It is a retired term that some suppliers still use in good faith. It describes real commercial obligations, you just need to understand what those obligations are and treat them as equivalent to DAP.
DDU and DDP sat at opposite ends of the import responsibility spectrum.
Under DDU, the seller delivered the goods but the buyer dealt with import customs, duty, and VAT. The “duty” was “unpaid” by the seller.
Under DDP: Delivered Duty Paid, the seller went the full distance. The seller handled import customs clearance, paid import duty, and paid import VAT in the destination country. The buyer simply received the goods at a named place, fully cleared and duty-paid.
DDP is the maximum obligation for a seller. It is also the most convenient option for a buyer who does not want to deal with customs at all.
Key differences:
DDP is common in e-commerce. When you buy from an overseas website and the price includes all taxes and duties, you are effectively buying on DDP terms. The seller has handled everything, you just wait for the parcel.
DDU, and its modern equivalent DAP, is more common in B2B trade, where buyers have their own customs processes and prefer to handle clearance themselves.
| Element | DDU (legacy — Incoterms 2000) | DAP (current — Incoterms 2020) | DDP (current — Incoterms 2020) |
|---|---|---|---|
| Seller delivers to named place | Yes | Yes | Yes |
| Seller handles export customs | Yes | Yes | Yes |
| Seller pays main freight | Yes | Yes | Yes |
| Risk transfers at destination | Yes — on arrival ready for unloading | Yes — on arrival ready for unloading | Yes — on arrival ready for unloading |
| Buyer unloads goods | Yes | Yes | Yes |
| Buyer handles import customs | Yes | Yes | No — seller handles it |
| Buyer pays import duty | Yes | Yes | No — seller pays it |
| Buyer pays import VAT | Yes | Yes | No — seller pays it |
| ICC recognised today | No — abolished 2010 | Yes | Yes |
| Seller needs UK EORI number | No | No | Yes |
| Good for buyers who want customs control | Yes | Yes | No |
| Good for buyers who want a hands-off import | No | No | Yes |
The practical conclusion: DDU and DAP are functionally the same. DDU has been replaced by DAP. If you are comparing options for a new shipment, use DAP or DDP, not DDU.
DDU applied to all transport modes under Incoterms 2000. There was no restriction on how goods were moved. A DDU shipment could travel by:
This flexibility was part of DDU’s appeal. It was not restricted to sea freight like some Incoterms (FOB, CIF, CFR), so it could be written into contracts for almost any shipment regardless of how it was moving.
DAP, which replaced DDU, has exactly the same flexibility, it applies to all transport modes.
DDU is not a recognised term in Incoterms 2020. It is not in Incoterms 2010 either. DDU was removed from the official ICC framework when the 2010 edition was published.
This matters for three reasons:
1. Contracts referencing DDU Incoterms 2020 are technically incorrect. You cannot use DDU under Incoterms 2020 because DDU does not exist in that edition. If a supplier writes “DDU Incoterms 2020” on a contract, that wording is contradictory. The safest course is to ask them to replace it with “DAP [named place] Incoterms 2020.”
2. Courts and arbitrators may interpret DDU by the last edition in which it appeared. If a dispute arose from a contract using “DDU” without specifying an Incoterms edition, a court would likely apply the Incoterms 2000 rules, the last version to contain DDU. That may or may not reflect what both parties intended.
3. DDU can still be contractually effective if both parties agree. Incoterms are not law. Parties are free to agree to any commercial terms they choose. A contract that specifies “DDU [named place], as per Incoterms 2000” is legally binding if both parties sign it. The obligations it creates are clear, they are just based on a retired edition of the ICC rules.
The bottom line: DDU is not valid in Incoterms 2020. If you need DDU-style terms today, use DAP. The obligations are identical.
DDU was widely used in UK trade before 2010 and remained common in practice even after the Incoterms 2010 revision. Here is what it meant, and still means, for UK businesses.
For UK importers buying on DDU terms:
The buyer is responsible for UK import clearance. This means:
For UK exporters selling on DDU (or DAP) terms:
If you are a UK seller offering DDU or DAP terms to overseas buyers:
UK ports most commonly involved in DDU and DAP shipments:
No. DDU was abolished when the ICC published Incoterms 2010. It does not appear in either the Incoterms 2010 or Incoterms 2020 rulebooks. The modern equivalent is DAP, Delivered at Place, which carries the same obligations. If a supplier quotes you DDU today, ask them to use DAP wording to ensure the contract is based on a recognised current standard.
In commercial practice, DDU and DAP are the same thing. The seller delivers goods to a named destination; the buyer handles import clearance and pays import duties. The difference is administrative: DDU was the term used under Incoterms 2000, and DAP replaced it in Incoterms 2010. The risk transfer point, the split of responsibilities, and the cost allocation are identical. If you see DDU on a quote today, treat it as DAP.
Under DDU (and its modern equivalent DAP), the buyer is responsible for import customs clearance and pays import duty and VAT. Under DDP, Delivered Duty Paid, the seller handles import customs clearance and pays all import duties and taxes on the buyer’s behalf. DDP is the maximum obligation for a seller. DDU and DDP are opposites in terms of import responsibility: DDU leaves it with the buyer; DDP places it entirely with the seller.
The buyer. Under DDU, the seller’s obligation ended at delivery to the named destination. All import costs: customs clearance, import duty, and import VAT, were the buyer’s responsibility. This is why the term included the word “unpaid”, the duty was unpaid by the seller. For UK buyers, this meant paying HMRC directly for import duty and VAT, typically through a customs broker.
Treat the quote as equivalent to DAP (Delivered at Place). Confirm with the supplier that they mean the seller will arrange and pay for freight to your named destination, and that you will handle UK import customs clearance and pay import duty and VAT. Ask them to clarify the named place of destination precisely, an address or terminal name, not just a city. Ensure you have a UK EORI number and a customs broker arranged before the goods arrive. If you want to formalise things, ask the supplier to restate the terms as “DAP [named place] Incoterms 2020.”
It means you are responsible for paying UK import duty and VAT. When your goods arrive in the UK, HMRC will expect an import declaration to be filed, normally by your customs broker. The broker will calculate the duty owed based on your goods’ commodity code and customs value, and payment will be due before the goods are released from customs. If you have a duty deferment account, you can defer payment to the following month. If you do not, you pay upfront.
Technically, yes, parties are free to agree to any commercial terms. But using DDU without specifying “Incoterms 2000” creates ambiguity. If a dispute arose, a court might interpret the term differently depending on which edition it applied. The cleaner, safer approach is to use DAP [named place] Incoterms 2020 and avoid any ambiguity. The obligations are the same; the legal certainty is much better.
No. DDU (Delivered Duty Unpaid) and DAT (Delivered at Terminal) were different terms. Under DDU, goods were delivered to a named place and unloading was the buyer’s responsibility. Under DAT, introduced in Incoterms 2010 and later replaced by DPU in Incoterms 2020, the seller was responsible for unloading at a named terminal. DDU became DAP; DAT became DPU. They replaced different terms and cover different scenarios.
ShippingEducation.co.uk publishes practical guides for UK importers, exporters, and freight professionals. Our Incoterms series covers all 11 current Incoterms 2020 rules, as well as legacy terms like DDU that still appear in trade documentation.
This article is part of a learning path — return to explore more topics.
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