DAP terms, easily explained

 The information provided here is part of Export Import Training online

The Buyers and Sellers are suggested to use Incoterms 2020, the latest version of delivery terms for movement of goodsClick here to read the extract of Inco Terms 2020, easily explained.


What is DAP terms in shipping? How does DAP work ?


 DAP terms of shipping has been introduced in 2010.   Before 2010,  DDU had been used almost similar to the functions of DAP.   However, DDU is used even now among some traders.

 

What is DAP?

The Buyers and Sellers are suggested to use Incoterms 2020, the latest version of delivery terms for movement of goods.  Click here to read the extract of Inco Terms 2020, easily explained.
DAP terms, easily explained copyDAP means, Delivered at Place ( up to the named destination mentioned).   In a DAP terms, the seller delivers goods  up to the destination mentioned in contract agreed mutually. 


The terms DAP can be used in any mode of transport.

Inco Terms 2010 defines DAP as  “Delivered at Place”   that the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination.

 

When does the risk passes from seller to buyer under DAP terms?


Under DAP terms, the risks passes from seller to buyer from the point of destination mentioned in the contract of delivery by seller.

The Buyers and Sellers are suggested to use Incoterms 2020, the latest version of delivery terms for movement of goods.  Click here to read the extract of Inco Terms 2020, easily explained.
For easy understanding the term DAP, once again let me explain in simple language below:


Once goods are ready for shipment, the necessary packing is done by seller at his on cost, so as to reach the material up to final destination safely.  The materials are moved to customs location opted by seller at exporting country at  his own expenses under DAP.   All necessary legal formalities in exporting country is completed by seller at his own costs and risks to move the goods to destination mentioned in DAP.      The necessary unloading cost at final destination has to be borne by Buyer under DAP terms, if specifically  not mentioned in contract.  

The Buyers and Sellers are suggested to use Incoterms 2020, the latest version of delivery terms for movement of goods.  Click here to read the extract of Inco Terms 2020, easily explained.


Once after arrival of goods at destination mentioned in DAP terms, the customs clearance at importing country needs to be completed by the buyer at his own cost and risk.  Transportation from the point of destination mentioned in DAP terms to final destination of buyer, need to be undertaken by seller at his own cost and risks.


So under DAP terms of shipping, the seller meets all expenses and risks to deliver the goods up to the destination mentioned in the contract.  From such point of location mentioned in DAP terms, the buyer undertakes all risks and responsibilities to reach the goods at his premises at his own expenses, if named place is not buyer's premise.

The Buyers and Sellers are suggested to use Incoterms 2020, the latest version of delivery terms for movement of goodsClick here to read the extract of Inco Terms 2020, easily explained.



Detailed articles about Inco Terms of Delivery under export and import of International business  have been mentioned in  separate category in this web site.    The Buyers and Sellers are suggested to use Incoterms 2020, the latest version of delivery terms for movement of goods.  Click here to read the extract of Inco Terms 2020, easily explained.

 The Buyers and Sellers are suggested to use Incoterms 2020, the latest version of delivery terms for movement of goods.  Click here to read the extract of Inco Terms 2020, easily explained.

CPT delivery terms, buyer or seller to unload goods at destination?

 

A comparative study between CIP terms and FOB terms

 

Less risk for an Exporter, Which Inco terms is better?

 

CIF terms, Importer or Exporter responsible to unload the goods?

 

CFR Terms of delivery, Exporter or Importer to unload goods at destination?

 

Who unloads goods under DAP terms of delivery at named place?

 

CIP terms of movement, Unloading goods by Buyer or Seller?

FCA terms, who is responsible to unload cargo at named place? 

Compare CIP and DPU based on delivery rules of ICC     Under FCA, who is responsible for export customs clearance?       Whose responsibility to arrange Insurance under FAS terms        Can I use FOB under Air shipment?     Minimum delivery risk, which Inco term is better for buyer?     DAP and CFR under Inco terms 2020     Compare between DAP and FOB rules for delivery     FAS and DAP under Inco terms 2020     How to differentiate DDP and DAP     DDP and FAS, a differentiating study     FOB and DDP under Inco terms 2020     DDP and CFR under Inco terms 2020, a comparison     CFR Terms of delivery, Exporter or Importer to unload goods at destination?     Who unloads goods under DAP terms of delivery at named place?     CIP terms of movement, Unloading goods by Buyer or Seller?     CPT delivery terms, buyer or seller to unload goods at destination?     FCA terms, who is responsible to unload cargo at named place?     Who arranges Insurance under CFR terms under Export Import trade?         

 

I hope, I could clarify DAP shipping term easily understand.  If you have different thought on DAP terms of shipping, please opine below.

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Comments


Seyed Jalal: Dear Mr. Kollerath, thanks for this article. that was really useful for me but there is a question here! who should bear with shipment costs from customs to warehouse of buyer at final destination in DAP? Seller or buyer should pay such costs? please help me to know that! Best Regards

Mohamed Adel: Thanks for above , i just need to understand whether customs clearance in importing country will be on expenses of seller or buyer

Debraj : I am Debraj sardar from kolkata,west bengal, i want to learn export import busness so that i have been browsing your web site last two month. i have a question that which is best secret way for goods delivery and payment ?--

Suresh Ruparel : We are likely to get a software related services export order to USA which we are unable to make.We have tried to outsource this project to a party overseas.How can we declare ourselves as Merchant Exporter and complete the transaction?The payment to outsourcing person will go to overseas.The payment from final client will come to India from USA.Please guide us. I am ready to pay any charges if any.

harish: dap trums who well pay the custom duty

Shailesh Zala: Dear Sir, we import shipmnet from Germany and Inco Terms is DAP. so kindly give suggestion is it custom clearance compulsory or not. if compulsory who is cleared the cargo. await for your valuable reposnce.

Mintesnot tadesse: Who is paid customs duty and tax?

Arlen Costaine: Can you please tell me about the import term "DAP" what does this mean?

Liene: Hi, If terms are DAP, does the freight charges has to be shown in Commercial Invoice (included in the total of the Invoice) for VAT and Duty purposes?

Serj: Hello, "Transportation from the point of destination mentioned in DAP terms to final destination of buyer, need to be undertaken by seller at his own cost and risks." By seller or the buyer? "the insurance up to the destination mentioned in DAP terms is arranged by seller at his own costs and risks." The seller is not under any obligation to arrange the insurance under the DAP terms. Is he?

Tul: I concur fully with Serj. There must be a msistake in that sentence and it must be read as "Transportation from the point of destination mentioned in DAP terms to final destination of buyer, need to be undertaken by BUYER at his own cost and risks." As responsibility ends at DAP point. If DAP point happens to be the final destination such as the buyer's factory all the transport up to that factory is paid by the shipper and the buyer only covers and performs unloading of the trucks. If the DAP point happens to be a port, transport from port to factory is on buyer's account + if we talk about containers I think unloading (unstuffing) of the containers are also on buyer's account at DAP point. If anybody thinks this is wrong please comment.

Martin: To keep it simple for you plebs: Seller of goods pays: Packing Labelling All Freight (to point of delivery agreed with buyer) Buyer of goods pays: Unloading Customs Clearance Duties & Taxes You as a seller are responsible for all transportation costs to the point of delivery and no further than that, all further transportation costs or unloading costs and such is the burden of the buyer to pay.

Terence : If the goods are delivered in containers, who will be responsible for the unstuffing?

jawaad: We found your contact from one website. After looking at your expertise in introduction, we think you can suggest us better solution of our problem. We are garments manufacturer, we got 15 orders from USA buyer through buying house. We made five orders and ship on FOB & CAD basis. The Container is in transit for last 20 days. After executing first five ordrers we faced loss so we informed buying house for cancellation of balance orders. Hopefully Vessel ETA is after five days but buyer sent an email that he did want shipment so make arrangements to return the Container. We need to know that if we do not get returned the Container then as it is shipped on FOB basis so as per incoterms it is under buyer's responsibility after the Container is onboard. However our Container covered 20 days sailing and near to reach at buyers port. Can buyer stop our Payment. We sent all docs. through our bank to buyer's bank.

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