What is the DAP Incoterm (Delivered at Place)
The DAP or “Delivered at Place” Incoterm replaces the now outdated DDU Incoterm, or Delivery Duty Unpaid, which appeared in the previous Incoterms edition, Incoterms 2000. The DAP Incoterm means that the seller must make the goods available to the buyer at the buyer’s chosen location. However, the seller is not responsible for unloading the goods from carrier at the destination location, or for any customs duties costs, tariffs, or taxes that may apply during the delivery.
The buyer is therefore responsible for all risks involved with processing customs clearancefor the goods to be imported, and all duties, taxes and other charges that may be added during this stage.
The DAP Incoterm is versatile as it can be used irrespective of the mode of transportation.
Seller’s obligations under the DAP Incoterm
- Delivery of goods and documents required
- Packaging and wrapping
- Inland transport in the country of origin
- Customs at origin
- Exit charge
- International freight
- Arrival expenditures
- Inland transport at the destination country
Buyer’s obligations under the DAP Incoterm
- Payment of the goods
- Customs on arrival (depending on arrival location)
- Payment of fees
Pros and cons of the DAP Incoterm for the exporter
Exporting under the DAP Incoterm means taking responsibility of practically everything in the destination country. Before agreeing on the DAP Incoterm, as an exporter, make sure the destination country that is safe, is one that you’re familiar with, or that your freight forwarder has a destination agent in place there.
The DAP Incoterm may mean higher risks for the exporter. But by being responsible for the majority of the processes and fees, the exporter can obtain more competitive prices for the purchase of the goods and the ocean freight transportation by negotiating directly with the shipping line or freight forwarder.
Pros and cons of the DAP Incoterm for the importer
As the buyer, the DAP Incoterm does not give you much control over the ocean freight and may not be the most competitive incoterm for you.
One advantage of buying under the DAP Incoterm is that it involves few responsibilities and risks for the importer.