The revised 2020 publication of incoterms includes the DAP rule, wherein the seller is responsible for unloading of goods at the nominated place. Here, his liability for the risk and cost of goods rests with him till the designated port, after which the duty shifts to the buyer.
DAP stands for ‘Delivery at Place’, and this incoterm can be used for any form of transport or even for more than one mode of transport. Under DAP terms, the seller and the buyer have to agree on the place of destination.
Likewise, the terms of unloading at the designated place should be indicated by the buyer as the cost of unloading will be borne by him, along with the importing charges and other local charges.
The incoterm DDU (Delivered Duty Unpaid) has been made inactive in incoterms 2020 -- the closest term that describes the functions of DDU incoterms under the revised guidelines is DAP.
What are the Shipping Terms under DAP 2020?
- In the DAP Incoterms, the place of destination is agreed by both parties. (Here the agreed destination is the importing country’s port.)
- The carriage responsibility stays with the seller.
- Though the carriage process is carried out by the seller, he is not responsible for unloading goods on the port.
- Unloading of goods at the importing country’s port is the responsibility of the buyer.
- The risk is transferred from the buyer to the seller at the designated port.
Seller’s Responsibilities
Delivery terms
Under DAP terms, the seller’s liability lies till the designated port, so his responsibility starts right from the place of origin, i.e., inland transport from the warehouse to the first port (exporter’s country) and then carriage proceedings & logistics from the first port to the nominated port (importer’s country).
Costs
The DAP payment terms are as follows :-
- Maintenance of goods in the warehouse
- Charges for inland transportation from the warehouse to the first port
- Freight forwarder's fees, for handling his logistics division/terms
- Terminal charges at the port
- Customs clearing charges
- Documentation charges
- Insurance
- Carriage charges
Freight terms
The seller pays for DAP freight as he is liable for carriage till the destination port as well as the inland transit from the warehouse to the port. This can be either road transport or rail transport, and also the shipping terms from the first port to the designated port are to be carried out by the seller.
Insurance
DAP incoterms does include insurance. The seller can pay for coverage for damage to goods till the designated port, and also take marine insurance if the goods are to be moved by ocean/sea. As the risk and damage to goods stays with the seller till the goods are delivered at the designated port, he is liable for the insurance of goods under DAP.
Duty and customs clearance
Export customs and related duties are carried by the seller. He is answerable for all necessary documents, i.e., bill of lading, commercial invoice, insurance certificate, packing list etc. for customs proceedings. All charges for export proceedings will be borne by the seller.
Also read: Ocean Freight in International Shipping | The Complete Guide
Buyer’s Responsibilities
Delivery terms
The buyer has responsibility for unloading goods at the destination country’s port. Later, inland transit of goods from the designated port to his owned warehouse is also a part of his responsibility.
Costs
The DAP payment terms are as follows :-
- Import customs charges
- Unloading charges (that is if the seller agrees to unload the goods at the port)
- Inland transportation charges
- Warehouse charges, for maintaining goods after the delivery process
Freight terms
The price for carriage is already paid by the seller so the only liability for the buyer is to take care of import customs proceedings and inland transit till his own warehouse.
Insurance
The buyer has no obligation for insurance as the risk of damage to goods is the seller's responsibility till the goods arrive at his country’s port.
Duty and customs clearance
In DAP terms, the import customs proceedings are the responsibility of the buyer. So the evidence of documents provided by the seller are to be acknowledged by the buyer. As mentioned earlier, the unloading of goods at the destination port is the buyer’s responsibility. He will be held chargeable for all the customs formalities.
Costs, levies & charges like freight demurrage charges, port charges etc levied after the risk transfer under DAP incoterms are borne by the consignee which can be either be the exporter or the importer depending on the agreed final destination.
Difference between DDP, DAP & CIF
FAQs on DAP Incoterms
Is DDU same as DAP?
Delivery duty Unpaid (DDU) is not included in the revised 2020 publication, the closest term that describes the functions of DDU incoterms is DAP Incoterms.
Does DAP include unloading?
Yes, DAP includes unloading of goods on the delivery destination port, and it is to be carried out by the buyer.
Who pays DAP freight?
The seller pays for the DAP freight as he is responsible for the carriage proceeding till the importer’s country port.
Does DAP include customs clearance?
DAP does include customs clearance, wherein the export customs are carried out by the seller and the import customs clearance is to be done by the buyer.
What is the difference between DAP and DAT?
The major difference between DAP and DAT is that the unloading of goods on the dock port in DAP is settled by the buyer, and in DAT the responsibility rests with the seller.
Is DAP and CIF the same?
Basic difference between the terms is the mode of transportation, where in DAP the parties have access to all modes of transport, in CIF they are restricted to water and inland transit.
