DAP - Delivered at Place

What is the DAP Incoterm (Delivered at Place)

The DAP Incoterm is a relatively new Incoterm introduced in the Incoterms 2010 edition. It replaced the old DDU (Delivery Duty Unpaid) Incoterm.

Under DAP, which applies to all modes of transportation, the seller is obligated to make the goods available for the buyer in the place selected by the buyer. The seller is responsible for most of the transportation process and leaves the buyer with the responsibility of import customs, unloading, and other duties and taxes.

This Incoterm requires minimal responsibilities on the buyer’s part, making it one of the most popular Incoterms. This helps sellers provide outstanding customer service by taking charge of the majority of the transportation process.

Although insurance is not required under the DAP Incoterm, most sellers opt to obtain insurance because of their significant responsibilities and liabilities.

The Seller’s Obligations Under the DAP Incoterm

• Deliver the goods and the required documents
• Checking, packaging, and marking
• Bear all risks of loss of or damage to the goods until they have been delivered
• Contract of carriage
• Transport-related security requirements
• Export and transit clearance
• Assist the buyer, if requested, in obtaining import clearance
• Custom handling fees at origin
• Notify the buyer that the goods have been delivered
• No obligation to make a contract of insurance

The Buyer’s Obligations Under the DAP Incoterm

• Pay for the goods
• Take the delivery of the goods
• May assist, at the seller’s request, in obtaining export and transit clearance
• Bear all risk of loss of or damage to the goods from the time they have been delivered
• Duties and taxes
• No obligation to make a contract of carriage
• No obligation to obtain insurance

What Does the Seller Pay For Under the DAP Incoterm?

• All costs relating to the goods until they have been delivered
• Charges for unloading, if they are for the seller’s account under the contract of carriage
• Costs of delivery and transit documents
• Duties and taxes

What Does the Buyer Pay For Under the DAP Incoterm?

• All costs relating to the goods from the time they have been delivered
• Costs of unloading, if they are for the buyer’s account under the contract of carriage
• Duties and taxes

The Seller is Responsible for Destination Delays

The DAP Incoterm makes the seller responsible for most parts of the shipping process. This includes when the goods have arrived at the destination, making them responsible for destination delays. When the goods get held up at the destination, the seller may be partially liable for delay fees and demurrage charges.

While this may seem unfavorable for the seller, it puts them in a position to charge more competitive prices by negotiating directly with a freight forwarder. However, it’s important that sellers are familiar with the destination country before agreeing on the DAP Incoterm, or at the very least, the freight forwarder should have a destination agent in the destination country.