Delivered at Place (DAP) – Incoterms in detail

The following article describes everything you need to know about the Incoterm “Delivered at Place” (DAP). In case of any questions or unclarities, do not hesitate to contact us.

What is Delivered at Place (DAP)?

DAP stands for “Delivered at Place” and is part of the Incoterms 2020. It replaces the former term DDU (Delivery Duty Unpaid) and can be used for all types of transport, even including those that involve several modes of transport.

If the Incoterm DAP is being used for selling or buying goods it indicates that the seller delivers the goods to a place that has been previously agreed on by both parties, the seller and the buyer. The agreed-on place can be any location, under the condition that the place is being specifically named. Arranging and transporting the goods to the agreed-on place is the seller’s responsibility whereas the buyer takes care of the import formalities, including import duties and tax costs. Right before the goods are being unloaded at their final destination, the risk transfers to the buyer. The buyer is also responsible for unloading the goods and any further transportation, if needed.

Why is DAP being used?

DAP is being used because the seller does not have to regulate the customs formalities and the buyer often knows their own countries import procedure, which can ease the whole process. Next to that, it clarifies the payment that is being due to the seller, the time and place of the delivery as well as the precise unloading spot at the named place of destination.

When is DAP being used?

The DAP Incoterm is often being used for transporting goods by land within countries of the continents Europe and Asia. DAP comes in handy when no customs processes are involved between the country of origin and destination, such as within the European Union. The International Chamber of Commerce (ICC) recommends using DAP for contanerized freight.

Example Situation for using DAP

Let’s say an Irish company sells 80,000 bottles of beer to a German buyer by using the DAP shipping terms. They agree on a warehouse address in Berlin. The Irish company would then need to pack and clear the goods for export, including paying for loading the goods as well as shipping fees to the carrier. As soon as the goods, in this case 80,000 bottles of beer, reach the port in Germany the German buyer must clear the goods for import and pays for all import documentation, duties and fees in Germany. The Irish company then pays to get the goods unloaded from the ship onto a truck in order to transport them to the agreed-on warehouse in Berlin. Once the cargo reaches the warehouse, the German buyer pays for unloading the goods from the truck. Right before the 80,000 bottles of beer are being unloaded, the risk of loss or damage transfers to the German buyer.

What are the Incoterms Obligations for DAP?

When using the Incoterm DAP, there are different obligations that the seller and the buyer must consider.

Seller’s Obligations:

Costs (export packaging, loading charges, export duty, taxes and customs clearance, terminal handling charges at origin and destination)
Shipment (delivery to port/place, freight charges, delivery to destination)
Responsible for delays, loss and damages before the shipment is handed over at the agreed-on location

Buyer’s Obligations:

Unloading the goods at destination
Arranging and paying for Import duty, taxes and customs clearance

Please note that In terms of Insurance costs, this can be arranged and paid for by either party as stated In the contract.

DAP vs. DDP

The main difference between DAP (Delivered at Place) and Delivered Duty Paid (DDP) is that when using DDP the seller is responsible for handling all iImport and export formalities except the unloading at the agreed-upon destination. Whereas for DAP, the buyer is only responsible for the unloading and handling of the import formalities (duty, taxes, customs).

DAP vs. EXW

The Incoterm Ex Works (EXW) places maximum responsibility on the buyer, meaning that the buyer is required to handle the shipping logistics, including the import customs formalities within the seller’s country. When using DAP (Delivered at place) on the other hand, the buyer is only responsible for handling the import formalities in their own country as well as unloading the goods at the agreed-on location.

How ALS can support you with the complexity of international commerce

ALS is an innovative, neutral, and globally active customs broker. We operate as a unified entity, where every member of our team, from your dedicated contacts to our board of directors, is committed to meeting your specified needs.

We are here to guide you through the process of international trade. Whether it’s speaking to one of our sales team, or requiring further guidance with our consultants, we offer everything to help facilitate your complete end-to-end customs solution. By law, we are not able to provide you with advice on which Incoterm you should use. However, we can provide you with information which you can use to make your decision.