Since the end of the U.S. «de minimis» exemption, every package crossing the border must be accompanied by a complete customs declaration, and duties must often be paid before delivery. For Canadian SMEs that ship to the United States or internationally, a technical issue has become a strategic one: should they choose the DDP or the DDU ?

These two Incoterms determine who pays duties and taxes, when they are paid, and who bears the risk of a shipment being held up at customs. Choosing the wrong one could result in unexpected costs for your customer, costly returns, and damage to your reputation. Choosing wisely ensures a smooth delivery process and protects your profit margins.

This 2026 guide provides a practical explanation of the difference between DDP and DDU, what the end of the de minimis rule means for Canadian shippers, and how to choose the right option based on your specific needs. The amounts listed are for reference only and may vary depending on the carrier, the service, and your commercial agreement.

DDP and DDU: What do these two Incoterms mean?

DDP (Delivered Duty Paid) : The sender covers all costs, including customs duties, taxes, and clearance fees. The customer receives their package without having to pay anything upon delivery. The price shown at checkout is the final, all-inclusive price.

DDU (Delivered Duty Unpaid), now often referred to as the Incoterm DAP, on the contrary, means that the recipient must pay the duties, taxes, and customs clearance fees at the time of delivery. Until these amounts are paid, the package may be held, delayed, returned… or even abandoned.

The difference is simple to explain: with DDP, you pay in advance on behalf of the customer; with DDU, the customer receives the invoice upon arrival.

Why the choice between DDP and DDU has become crucial in 2026

Until 2025, many small shipments flew «under the radar» thanks to the de minimis thresholds: $800 for $ shipments to the United States, and €150 in Europe. Below these amounts, no duties, no paperwork. That world is disappearing.

As of August 29, 2025, shipments to the United States are no longer eligible for the de minimis exemption: every package, regardless of its value, must have duties prepaid or comply with the USMCA to enter duty-free. In Canada, the threshold remains one of the lowest in the world, at just CA$20 for duties and CA$40 for taxes. And in July 2026, the European Union will in turn eliminate the €150 threshold.

The result: almost all cross-border shipments now trigger duties. The question is no longer «Will there be charges?» but «Who pays them, and when?» That is exactly what DDP and DDU clarify.

DDP vs. DDU: A Comparison for Canadian SMEs

On the surface, DDU seems more cost-effective for the shipper, since it charges «only» for transportation. But that cost hasn’t gone away—it’s simply passed on to the customer, who discovers it at the worst possible moment, right at their doorstep.

How much does it really cost? The numbers that matter

The DDP vs. DDU debate isn’t just about customs: it’s a matter of conversion and customer loyalty. Several industry statistics speak volumes for those who sell online:

• 48 % of buyers abandon their shopping carts due to unexpected costs, including shipping fees, taxes, and duties.
• Approximately 10,100 DDU shipments are refused or returned due to unexpected customs fees.
• A returned package means two shipments, customs clearance that has to be done all over again, and, often, a lost customer.

The total cost of a shipment is actually comparable whether you choose DDP or DDU: the difference is that DDP combines shipping and duties into a single price, which is displayed upfront. DDU appears cheaper, but hides the «missing duties» that the customer will have to pay later, sometimes with additional handling fees charged by the carrier.

How to choose based on your sender profile

Choose DDP if…

You sell online to consumers, regularly ship to the United States or Europe, and the customer experience is at the heart of your brand. DDP reduces cart abandonment, minimizes customer service disputes, and speeds up customs clearance. It’s also the most reliable choice for breaking into a new market.

The DDU term may be appropriate if…

You ship B2B to companies that already have their own customs broker, are familiar with import procedures, and prefer to retain control over their customs clearance. In this case, DDU prevents the shipper from having to pay upfront duties, which can sometimes be substantial, on high-value orders.

Switching to DDP: Practical Tips

Adopting DDP requires a little preparation, but it's well worth the effort:

• Calculate the total landed cost upstream: cost of goods + shipping + duties + taxes, to be displayed at checkout.
• Use the correct HS codes (Harmonized System) to ensure that duties are calculated correctly and to avoid delays.
• Check ACEUM/CUSMA eligibility : A product manufactured or substantially processed in Canada, the United States, or Mexico may enter the United States duty-free, which significantly reduces the DDP cost.
• Compare DDP offers from Purolator, FedEx, UPS, and DHL: customs clearance and handling fees vary by carrier.
• Take care of your commercial invoice : Since the de minimis rule was abolished, it has been mandatory for every package and determines how quickly customs clearance is processed.

Conclusion: DDP, a competitive advantage in 2026

In a landscape where de minimis thresholds are disappearing and duties apply to nearly all shipments, the choice between DDP and DDU is no longer a technical detail—it’s a business decision. DDU may seem simpler, but it shifts the risk and any unpleasant surprises onto your customer. DDU, on the other hand, transforms customs into a seamless and transparent experience, becoming a real selling point for international business.

Are you unsure which option is best suited to your shipments, or do you want to optimize your shipping costs? The teams at’Shipping Store assist Canadian SMEs in selecting a carrier, calculating fees, and setting up DDP. Visit expertshipping.ca to make shipping easier in 2026.