How to Ensure Freight Forwarders Use Your Importer Information and Tax ID for U.S. Customs Clearance

2024/04/16

Recently, DDP (Delivered Duty Paid) shipments have increasingly raised legal concerns in the international arena.

It’s undeniable that most DDP services in the market rely on three key aspects:

#1. The primary profit for most DDP services comes from the customs duties in the U.S. Under-declaring product values to "deceive" U.S. Customs and pay lower import duties has become an open secret.

#2. However, DDP remains a highly reliable customs clearance method overall. Statistics show that under the DDP model, freight forwarders achieve a clearance success rate of over 98%. Such a high success rate makes DDP shipments an attractive option, seen as a "cost-saving measure" within the legal framework by leveraging certain rules. After all, who can tell whether the cup I bought was purchased for $5 or $10?

#3. All freight forwarders that offer DDP shipping services are also capable of providing traditional shipping methods, including port-to-port, standalone customs clearance services, U.S. domestic trucking, and DAP (Delivered at Place) services. However, most freight forwarders offering DDP will claim they do not provide DAP or port-to-port services. The reason is simple: these traditional services are highly transparent in pricing, leaving little room for profit. As a result, they prefer to offer higher-margin DDP services rather than more “legitimate” DAP or port-to-port options.

One thing to keep in mind is that genuine DDU (Delivered Duty Unpaid) or DAP services should involve the actual importer’s credentials for customs clearance, not the freight forwarder's. Strictly speaking, if you choose DAP service but your IRS number and bond are not used by the forwarder, it’s likely they used their own Importer of Record (IOR) credentials for clearance.

IRS document