DDP sea freight calculation formula

DDP shipping cost calculation is closely related to many factors. Now I will share with you a simplified version of the DDP shipping cost calculation formula, which is easy to understand.

The calculation of DDP sea freight requires reference to the following costs:

1. Purchase cost: refers to the price at which the seller purchases goods from the supplier, usually based on FOB (free on board) or CIF (cif)
2.Domestic transportation and miscellaneous charges: refers to the expenses incurred by the seller to transport the goods from the factory or
warehouse to the port of departure, and to carry out operations such as container loading, customs declaration, and inspection.
Ocean freight: refers to the fee stipulated in the transportation contract signed between the seller and the shipping company or freight forwarding company. It is usually calculated based on the weight or volume of the goods.

Destination port fees: refers to the fees incurred by the seller in handling import customs clearance procedures at the destination port, paying relevant import taxes and fees, picking up the goods and arranging services such as towing, unpacking, and local delivery.

After understanding the reference factors of DDP sea freight, let’s look at the calculation formula of DDP sea freight:

DDP fee = purchase cost * [(1-1/1.17*0.1) + (customs declaration and inspection + F domestic transportation and miscellaneous fees)] * (1+z*y)+ F shipping + (THC+customs clearance)*z

Among them, z is the exchange rate, y is the value-added tax rate of the destination country, F is the ocean freight rate, and THC is the terminal operating fee of the destination port.

Let’s use data as an example to give you a deeper understanding:

- For example, suppose the seller exports a batch of clothing from China to the United States. The FOB price of the clothing is US$10,000, the freight is US$500, the insurance premium is US$100, the tariff rate is 5%, and the value-added tax rate is 10%.

Then DDP sea freight can be calculated according to the following steps:

Calculate the CIF price: CIF = FOB + freight + insurance = 10,000 + 500 + 100 = 10,600 US dollars

Calculate domestic transportation and miscellaneous fees: Assume that the customs declaration and inspection fee is 2,000 yuan, F domestic transportation and miscellaneous fees is 0.05, domestic transportation and miscellaneous fees = customs declaration and inspection + FOB * F domestic transportation and miscellaneous fees = 2000 + 10000 * 0.05 = 3,000 yuan

Calculate the purchase cost: Purchase cost = CIF / (1-1/1.17*0.1) = 10600 / (1-0.085) = 11586.21 US dollars

Calculate the destination port fee: Assume that the THC is 200 US dollars and the customs clearance fee is 300 US dollars, then the destination port fee = (THC + customs clearance) * z = (200 + 300) * 6.5 = 3250 yuan

Calculate DDP sea freight: DDP = purchase cost * (1+z*y) + F sea freight + destination port fee = 11586.21 * (1+6.5*0.1) + 500 + 3250 = 15736.21 US dollars

Have you learned it? The amount in the above DDP calculation formula is just a simulation and is for reference only. If you have goods shipped from China to the United States DDP, click on the homepage to contact us.

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