DAP (Delivered At Place) – what is it?
DAP, or “Delivered At Place”, is a term used in international trade and shipping that denotes a specific Incoterm, or International Commercial Term. In a DAP transaction, the seller is responsible for delivering the goods to a predetermined location, usually specified by the buyer. All transportation costs, including export duties, shipping charges, and any costs related to transporting the goods to the designated location, are borne by the seller. However, once the goods are made available for unloading at the specified place, the buyer assumes the responsibility for import duties, taxes, and other charges. DAP terms ensure clarity between trading partners on delivery obligations, reducing ambiguities and ensuring smoother transactions.
Most common questions
1. How does DAP differ from other Incoterms?
DAP differs from terms like EXW (Ex Works) where the buyer is responsible for the entire shipping process, or CIF (Cost, Insurance, and Freight) where the seller covers the costs up to the destination port, including insurance. In DAP, the seller handles all costs and risks until the goods are ready for unloading at the specified location.
2. Who handles the import duties and taxes under DAP?
Under DAP terms, while the seller covers transportation and associated risks up to the designated place, the buyer is responsible for all import duties, taxes, and other associated charges once the goods reach the specified location.
3. Is DAP suitable for any mode of transportation?
Yes, DAP is versatile and can be used irrespective of the mode of transportation. Whether the goods are transported by sea, air, rail, or road, the DAP Incoterm can be applied, making it suitable for various logistical scenarios.
4. Are there any potential drawbacks to using DAP?
While DAP provides clarity on delivery responsibilities, it can also introduce complexities, especially if there are unforeseen challenges at the destination, such as delays in unloading or customs clearances. In such cases, communication between the buyer and seller is crucial to address and resolve any potential hiccups efficiently.
