International Shipping Costs Explained
A practical guide to international shipping expenses—including duties, taxes, and fees—so you can ship with confidence and avoid surprises.
What is a landed cost?
Landed cost is the total expense of shipping a product. For international shipments, the landed cost will include applicable duties, taxes and fees.
You can offer your customers the transparency of a guaranteed landed cost by integrating the UPS® Global Checkout API onto your e-commerce site.
How are international shipping costs determined?
The cost for an international shipment depends upon the details of the shipment: the value of the items being shipped, the country of manufacture, the origin and destination countries and the purpose of the shipment (i.e. gift, items sold, documents of no commercial value, etc.).
It is critical that the shipper fill out the commercial invoice and any additional customs forms fully and be as specific as possible. Providing the products HTS (harmonized tariff) code helps ensure that import charges will be assessed accurately and helps ensure customs clearance.
Who pays international duties, taxes and fees?
Either the shipper or the receiver will be responsible for payment of duties, taxes and fees. In rare instances, these may be charged to a third party.
If You’re the Shipper:
If you do not have a UPS payment account and are simply paying with a credit card, the shipment will default to DDU. This means the receiver will be responsible for any duties, taxes and fees required to receive their shipment. By opening up a UPS payment account, you can choose who will pay when you create the shipping label.
If the recipient will be covering these charges, we recommend you inform them of this before the transaction, to avoid any surprises. Please note: if the receiver does not pay, UPS may recover the outstanding amounts from you.
If You’re the Recipient:
You may have received a notice that you owe additional charges on your international shipment. We’ve compiled a list of the most common import charges along with definitions of each.
What are Incoterms®?
Incoterms® (short for International Commercial Terms) are 11 globally recognized trade terms used to clarify the roles of buyers and sellers in international sales. These rules outline responsibilities for the allocation of costs, among other things.
It is the shipper’s responsibility, when creating a shipping label, to select the incoterms for that particular shipment. If the shipper does not make a selection, it will default to DDU (Delivery Duty Unpaid) meaning the receiver will be responsible for paying the landed costs.
We’ve compiled an overview of various Incoterms definitions to help you better understand the options.
What is the difference between DDU and DDP?
When the shipper pays duties, taxes or fees, it is called Delivery Duty Paid (DDP). This can improve the customer experience by providing additional clarity and transparency during the buying process. Delivery Duty Unpaid (DDU) means the receiver will need to pay.
