What is DAP Shipping? – Delivered at Place

Table Of Content hide

1 What is DAP Incoterms?

2 The Importance of DAP Shipping

3 According to DAP Incoterms, what is each party responsible for?

4 When should you choose DAP?

5 DAP Cost and Prices

6 Advantages and Disadvantages of DAP shipping

7 DAP vs. other Incoterms

8 Ship DDP with Egypt IOR

9 Frequently Asked Questions

Did you know that DAP shipping is one of the most popular Incoterms in 2020? As global trade continues to grow, understanding the distinctive of different shipping terms has become essential for businesses to manage costs and responsibilities effectively. DAP, or Delivered at Place, has gained significant traction because it provides a clear division of responsibility between the buyer and seller, especially regarding the transportation and delivery of goods.

In this article, we will explain what DAP is, how it differs from other Incoterms, and why it became such a favored choice for international shipments.

What is DAP Incoterms?

Delivered at Place shipping, also known as DAP shipping, is an Incoterm in international trade in which the seller is responsible for all costs, risks, and logistics of transporting goods to a specified destination, excluding unloading. The seller handles transportation, export duties, and risk management until the delivery point, ensuring the shipment aligns with the contract of sale. Once the goods arrive, the buyer assumes responsibility for unloading, import duties, customs clearance, and any local taxes, such as tariffs and VAT.

The Importance of DAP Shipping

DAP shipping is a crucial Incoterm that provides clarity and structure in international trade agreements. However, disputes can arise due to delays or miscommunications, such as demurrage fees, where goods are not unloaded on time due to incomplete documentation or lack of timely authorization. These fees, determined by local or national authorities, vary widely across countries and even between ports within the same country, adding complexity to DAP agreements. Below, we will explain why dap shipping is important in trading:

Risk Allocation

DAP shipping clearly defines the point where risk transfers from the seller to the buyer. This clarity allows both parties to manage risks more effectively, ensuring accountability and reducing potential conflicts.

Cost Clarity

By outlining each party’s responsibilities, DAP eliminates ambiguities in the shipping process. This transparency helps avoid unexpected costs or disputes, ensuring a smoother financial agreement.

Customs and Duties

Under the DAP term, the buyer is responsible for import clearance, duties, and taxes. This distinction makes it essential for buyers to prepare for these costs, which can significantly impact the total expense.

Operational Certainty

The standardized nature of DAP provides a clear framework for responsibilities. This leads to smoother transactions, better collaboration between parties, and fewer misunderstandings in the shipping process.

Global Standardization

As a globally recognized Incoterm, DAP fosters confidence in international trade. It provides a common language and guidelines that reduce ambiguities and streamline cross-border transactions.

Logistical Efficiency

Sellers are responsible for transporting goods to the destination under DAP. This requires careful logistical planning, which ensures safer and more efficient delivery methods.

Buyer Protection

With DAP delivery, the buyer assumes responsibility only after the goods arrive at the specified location. This provides buyers with added protection, as they are not liable for issues that may arise during transit.

According to DAP Incoterms, what is each party responsible for?

When using DAP Incoterms, it’s crucial to clearly understand the division of responsibilities between the seller and the buyer. Each party has specific obligations regarding costs, risks, and processes to ensure a smooth transaction. Below is a breakdown of the key responsibilities under DAP delivery terms:

Responsibilities	Seller	Buyer
Costs & Risks	Covers all costs and risks from the origin to the agreed destination.	Assumes all costs and risks once the goods arrive at the destination.
Packing & Transport	Ensures proper packing and handles transportation to the specified location.	Handles transportation and logistics after unloading at the destination, if applicable.
Documentation	Manages export duties and provides all necessary shipping documents.	Responsible for customs clearance, import permits, proof of payment, and covering duties.
Unloading	Not responsible for unloading.	Handles unloading at the named destination.
Delivery Obligation	Delivers goods to the agreed location as mentioned in the contract.	Takes responsibility for the goods upon arrival and after unloading.

When should you choose DAP?

DAP is a good option for goods shipped in containers or on pallets. It means the seller will deliver the goods to a specific location, and once the goods arrive, the buyer will take over. This term applies to all modes of transport, such as air, sea, rail, or road, and even to combined transport methods.
For example, if the agreement says “DAP, Port of Alexandria,” the seller is responsible for getting the goods to the port. Once the goods are there, the buyer handles unloading and customs clearance and pays any import duties or taxes.

DAP Cost and Prices

When shipping under DAP shipping Incoterms, The seller is responsible for transporting goods from the port to the final delivery location, but the buyer may incur additional delivery costs after the goods are unloaded. These fees include the following:

Transportation Costs: The seller covers the cost of shipping goods to the agreed destination by sea, air, rail, or road.
Freight Insurance: The seller arranges and pays for insurance to protect the goods during transit.
Packaging Costs: The seller is responsible for packaging the goods to ensure safe transport and compliance with shipping regulations.
Export Customs Clearance: The seller handles the export customs clearance process and any associated fees in the seller’s country.
Port or Terminal Handling Charges: The seller pays for unloading and handling fees at the port or terminal until the goods reach the destination.
Import Customs Duties and Taxes: The buyer is responsible for import duties and taxes upon the goods’ arrival in their country.
Unloading Costs: The buyer is responsible for unloading the goods once they arrive at the specified destination.
Delivery to Final Destination: The seller is responsible for transporting goods from the port to the final delivery location.

Advantages and Disadvantages of DAP shipping

When using Delivered at Place incoterms, there are both advantages and disadvantages to consider. Understanding these can help businesses decide if DAP is the right choice for their shipping needs. Below is a comparison of the key advantages and disadvantages of DAP shipping to help you evaluate its suitability for your business:

Advantages of DAP	Disadvantages of DAP
Clear Responsibility Split	Potential Disputes Over Costs
DAP clearly defines the seller’s and buyer’s responsibilities, reducing misunderstandings about who is responsible for what.	Disputes can arise regarding who should pay extra charges such as demurrage or storage fees if the goods are delayed at the port.
Buyer’s Minimal Liability	Seller’s Increased Liability
The buyer is only responsible for costs after the goods are delivered, minimizing their risk during transit.	The seller is responsible for risks and losses during transportation, which can be a burden for them.
Improved Cash Flow Management	Customs Delays and Extra Costs
DAP allows buyers to manage cash flow better by paying only after goods are delivered, which helps with frequent reordering.	Delays at customs, additional handling fees, and detention costs are the buyer’s responsibility, potentially adding unforeseen expenses.

DAP vs. other Incoterms

When comparing DAP shipping with other Incoterms, it’s important to understand how each one differs in terms of responsibilities, costs, and delivery processes. Below are the key distinctions between DAP and other common Incoterms like DDP, DDU, and DAT:

DDP Shipping Incoterm

With DDP, the seller is fully responsible for all costs, including import duties, taxes, and customs clearance, and delivers goods directly to the buyer’s location. In contrast, with DAP, the buyer is responsible for customs duties and taxes. Thus, if we compare DDP vs DAP, DDP is more convenient for the buyer as the seller handles all costs.

DDU Shipping Incoterm

DDU requires the seller to deliver goods to the agreed-upon location but leaves the buyer responsible for paying import duties and taxes and handling customs clearance. In contrast, DAP requires the buyer to handle only customs clearance and duties. Thus, if we compare DAP vs DDU, the DDU burdens the buyer more, often leading to unexpected costs upon arrival.

DAT Shipping Incoterm

With DAT, the seller delivers goods to a terminal and is responsible for transport and export clearance. The buyer then handles customs clearance, import duties, and transportation to the final destination. If we compare DAP and DAT, DAT limits delivery to a terminal, meaning the buyer assumes more responsibility for further transportation.

Ship DDP with Egypt IOR

When shipping internationally, choosing the right Incoterm can significantly improve the efficiency of your process. Delivered Duty Paid (DDP) shipping service with Egypt IOR ensures that we seamlessly manage all responsibilities, including transportation, import duties, taxes, and customs clearance. By selecting DDP, you eliminate the complexities of international shipping and reduce the risk of unexpected charges or delays.

As your Importer of Record (IOR), we take care of all the necessary steps to ensure smooth customs compliance, so you can focus on growing your business.
Partner with Egypt IOR for a comprehensive, worry-free shipping solution. We handle the entire logistics process from start to finish, ensuring timely delivery and full compliance with Egyptian import regulations.

Fill out the form to discuss how we can optimize your shipping strategy and provide a tailored DDP solution for your business needs.

Frequently Asked Questions

No, DDU (Delivered Duty Unpaid) is not the same as DAP (Delivered at Place). DAP replaced DDU in the 2010 revision of the Incoterms by the International Chamber of Commerce (ICC). While both terms involve the seller delivering goods to a specified destination, the primary distinction lies in the responsibilities for customs clearance and import duties. The shift from DDU to DAP was made to provide more clarity and reduce potential disputes by defining the buyer’s and seller’s responsibilities more clearly in terms of delivery and importation.
No. Under DAP, the seller is responsible for delivering the goods to the agreed-upon location, but the buyer is responsible for unloading them upon arrival.
No, under DAP, customs clearance is the buyer’s responsibility. Once the goods arrive, the buyer must handle all import duties, taxes, and necessary paperwork for customs clearance in their country.