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DAP (Delivered At Place) is one of the international Incoterms® used to determine the responsibilities between buyer and seller in international trade.
This Incoterm®, introduced by the ICC (International Chamber of Commerce), creates clear agreements on freight and delivery.
But what exactly does DAP mean, and how does it affect both the buyer and the seller?
What does DAP mean?
DAP stands for Delivered At Place, which means that the seller is responsible for delivering the goods to a specific location agreed upon by the parties. This could be a port, a warehouse or another destination.
The seller pays the freight costs and bears the risk and insurance until the goods are made available at the agreed location.
ATTENTION: The seller is not responsible for unloading the goods. DAP means that the seller delivers the goods unloaded, and responsibility ceases when the goods are ready for unloading at the destination.
The difference between DAP and DPU
Unlike DAP, where goods are delivered unloaded, DPU (Delivered At Place Unloaded) requires that the seller is responsible for unloading.
With DPU, the buyer only assumes responsibility once the goods have been unloaded, whereas with DAP, the buyer must arrange and pay for unloading themselves. The choice between the two depends on who is best able to handle unloading at the destination.
If you would like to learn the difference between the remaining Incoterms® such as FOB, CIF and DDP, and get an overview of their responsibilities, you can read our post about Incoterms® 2020.
Responsibility with DAP
With DAP, the seller is responsible for delivering the goods unloaded to the destination.
Seller's responsibility:
- Packaging of goods in accordance with agreed standards
- Handling export formalities in the country of origin
- Organisation and payment of transport to the agreed destination
- Risks and costs until the goods are ready for unloading
ATTENTION: The seller shall not unload the goods/merchandise, but only make them available.
The buyer assumes responsibility once the goods have been loaded on board and must:
- Unloading goods from the means of transport
- Payment of import duties, customs duties and VAT in the recipient country
- Handling local distributions from the destination
Pros and cons of DAP for the seller
Pros:
- Greater control over transport provides a better overview of delivery
- Opportunity to offer a more comprehensive service to the customer
Cons:
- Higher costs, as the seller must pay for transport costs to the destination
- The risk of delays during transport lies with the seller.
Pros and cons of DAP for the buyer
Pros:
- The seller handles transport all the way to the destination.
- Should not cover the risk of transport damage before the goods arrive
Cons:
- The buyer is responsible for customs clearance, which can be complex in certain countries.
- The cost of unloading may be an additional burden.
To sum up
DAP Incoterm® provides a clear division of responsibilities, with the seller handling transport and the buyer responsible for customs clearance and unloading.
The advantages of DAP depend on what the seller and buyer can handle. Sellers can offer a complete service, while buyers must be able to handle customs and local delivery.
Get an overview of the responsibilities under all Incoterms® 2020.
FAQ
What is DAP Incoterms® customs duty?
With DAP Incoterm®, the buyer is responsible for paying import duties, VAT and any other taxes upon arrival of the goods in the country of destination. Although the seller is responsible for transport to the destination, the buyer is responsible for customs clearance and paying the necessary taxes.
What does DDP Incoterms® mean?
DDP (Delivered Duty Paid) is another Incoterm®, where the seller assumes full responsibility for transport, delivery and payment of all charges, including customs duties and VAT, to the place of delivery in the buyer's country. This differs from DAP, where the buyer is responsible for customs duties and import charges.
What are DAP Incoterms® 2024?
There is no Incoterms® 2024 edition. The latest version is Incoterms® 2020, and before that it was Incoterms® 2010.
DAP Incoterm® 2020 means that the seller is responsible for transporting the goods to an agreed destination. When the goods reach their destination, responsibility for risks and costs is transferred to the buyer, who is responsible for unloading and import processing, including customs duties and taxes.
What is the difference between DAP and DDP Incoterms®?
The main difference between DAP and DDP Incoterms® is that with DDP, the seller is responsible for all costs and charges, including customs duties and VAT, until the goods are delivered to the buyer.
In DAP, the seller is only responsible for transport and risks up to the destination, while the buyer handles customs clearance and duties in the recipient country.
What does DAP delivery mean?
DAP delivery means that the seller delivers the goods to an agreed location, where the buyer is responsible for unloading and any local costs such as customs duties, VAT and other taxes. Delivery is complete when the goods are made available to the buyer at the destination, but without being unloaded.
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