What is DAP Shipping? Delivered At Place
Delivered At Place (DAP) is a key term in international trade, defined under the Incoterms rules by the International Chamber of Commerce (ICC). Essentially, when a DAP agreement is in place, the seller handles all the costs and risks involved in getting the goods to a specified destination. Once the shipment reaches that location, however, the buyer takes over—responsible for import duties, taxes, and any required clearance procedures.
Since its introduction in the ICC’s 2010 Incoterms edition, DAP has become invaluable for global trade, particularly in managing complex supply chains and ensuring clarity in shipping responsibilities.
How is DAP Delivered at Place Works?
In the world of international trade, misunderstandings around financial responsibilities are quite common. To help avoid this confusion, Incoterms were established to clearly define the roles of buyers and sellers. One such term is DAP or Delivered At Place, which lays out that the seller is responsible for all costs and risks involved in delivering goods to a specified location.
This covers everything from packaging and documentation to export clearance and transportation fees.
Once the goods arrive, the buyer steps in to handle unloading and all import-related formalities. What makes DAP particularly flexible is that it can be used with any mode of transportation—land, sea, or air.
A typical DAP agreement might specify something like “delivered at place, Port of Oakland,” indicating the exact point where the seller’s responsibilities end and the buyer’s begin.
Who Pays for DAP Shipping?
Under a DAP Incoterm agreement, the seller handles all transportation costs right up to the designated destination. Once the goods arrive, though, the baton passes to the buyer.
At this point, the buyer is responsible for unloading the shipment and covering any import-related expenses, such as tariffs and taxes. This setup provides a clear division of costs and responsibilities, making the process smoother for both parties involved.
Is DAP for Sea or Air Shipping?
One of the advantages of DAP shipping is its flexibility—it can be used with any form of transportation, including land, sea, and air. The delivery location can be a port, airport, or even a buyer’s warehouse, allowing DAP to adapt to various shipping needs.
DAP Obligations
The ICC provides specific guidelines that outline the responsibilities of both the seller and buyer under DAP terms. Here’s a breakdown of the key obligations for each party:
Sellers
Under DAP, sellers take on the bulk of the responsibilities, which include:
- Documentation: The seller must arrange all necessary documents, such as invoices, packaging lists, and any documents required for export.
- Licensing: The seller has to obtain any export licenses and handle customs procedures on their end.
- Transport: The seller is responsible for arranging transportation, which includes delivering the goods to the port, loading them onto the transport vehicle, and shipping them to the destination.
- Costs: All costs up to the specified delivery location are borne by the seller. This also includes any losses that may occur during transit.
- Proof of Delivery: Once the goods arrive at the destination, the seller must provide proof of delivery to the buyer.
Buyers
While the seller has most of the responsibilities in a DAP agreement, buyers still have specific duties:
- Payment: The buyer is responsible for paying the seller for the goods and providing them with the delivery location.
- Import: Upon arrival, the buyer must handle all import-related formalities, such as completing any required forms.
- Unloading: The buyer must make arrangements to unload the shipment once it arrives.
- Costs: Import duties, taxes, and levies are the buyer’s responsibility once the shipment has reached the destination.
- Transport: After unloading, the buyer is responsible for moving the goods from the port or delivery location to their final destination, such as a warehouse or retail store.
In summary, DAP—Delivered At Place—incoterms offer a clear outline of responsibilities that ensure smooth transhandle actions between buyers and sellers. By understanding each party’s obligations, businesses can streamline their shipping processes and avoid unexpected costs. Whether by land, sea, or air, DAP terms can simplify logistics and provide both parties with a transparent, efficient trade framework.
Related Terms
- Importer of Record
- Exporter of Record
- Delivery Duty Paid
- Delivery Duty Unpaid
- Delivered at Terminal
- Consignee
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