Every DDP seller reaches the same moment: the duty bill arrives, and someone says we should run this on FOB. The decision is usually right; the execution is where containers get stuck. Four things have to change before the first FOB shipment sails, and three of them are paperwork with a lead time.

A case, anonymised

A Shenzhen seller of small appliances ran DDP into the US for two years. Duty inside the DDP price was calculated at 7.5%; the actual entry came back at 3.4% because the product classified elsewhere. The seller switched to FOB so the buyer would own the entry. The first container under the new term was held for nine days: the buyer had no bond, and the bill of lading still named the forwarder as consignee.

1. The importer of record changes hands

  • The buyer must be able to act as importer: a US EIN, a customs bond, and a power of attorney to a broker
  • A foreign company can be the importer of record, but needs a US-resident agent — and that takes longer than a week to arrange
  • The consignee on the bill of lading, the importer on the entry and the buyer on the invoice have to be the same legal entity

2. Bond, tax numbers and the accounts behind them

  • US: a single-entry bond for the trial shipment, a continuous bond once volume is steady
  • EU and UK: EORI number and VAT registration; import VAT is only recoverable if it is assessed against your own number
  • Check who is named on the existing bond — many DDP sellers find it is the forwarder's

3. Documents and filings move with the term

  • ISF becomes the buyer's filing, but the manufacturer, seller and stuffing location still come from your side — agree who sends them and by when
  • The commercial invoice must state FOB and the named port, and the value no longer includes freight, insurance or duty
  • Origin marking stays your job: changing the term does not change who marks the product
  • Ask the broker to confirm classification and duty rate before the first sailing, not after it

4. Pricing and the conversation with the customer

  • Quote FOB: origin charges included, main carriage excluded — say which on every line
  • The buyer's landed cost now carries freight, insurance, destination charges, duty and VAT; expect the "your price went down" conversation
  • Who books the space, who picks the sailing and who carries the demurrage risk all move to the buyer — put it in writing

The transition, in order

  1. Weeks 1–2: the buyer obtains the EIN, bond or EORI, and signs the broker's power of attorney
  2. Week 2: agree who files ISF and who supplies the ten data elements
  3. Week 3: reissue the quotation as FOB, line by line
  4. First shipment: run it alongside the old arrangement if you can, and read the entry before the second container

Changing a term is a paperwork project with a sailing date attached. If you are planning it, send us the product, the destination and your current DDP rate — we will list what has to change on your side, in the order it has to happen.