The DAP (Delivered At Place) shipping
In international trade, properly defining the delivery terms under DAP plays a key role in reducing risks and ensuring transparency between the parties. One of the popular options is the DAP (Delivered At Place) term, which involves delivering goods to an agreed-upon place of destination.
Here’s a detailed explanation of how this type of delivery works, what responsibilities each party holds, and what to consider when choosing this term for international supply.
What is DAP: Definition in Incoterms 2020
DAP stands for Delivered At Place. This means that the seller is responsible for transporting the cargo to the agreed place. The key difference between this term and others is that the seller does not pay for unloading or import customs clearance.
The Delivered At Place term is appropriate in situations where the buyer wants the goods delivered as close as possible to their location but is willing to handle customs clearance themselves. Compared to DDP (Delivered Duty Paid), where the seller covers all customs duties, DAP involves lower costs for the seller but requires more organizational effort from the buyer.
Responsibilities of the Parties Under DAP
Seller’s responsibilities:
- Package and load the goods;
- Pay for the main transportation;
- Deliver the freight to the agreed destination;
- Provide all necessary transport documentation.
Buyer’s responsibilities:
- Handle import customs clearance;
- Pay import duties, VAT, and other fees;
- Organize unloading of the goods (unless agreed otherwise).
Most Common Modes of Transport Used With DAP
DAP Incoterms 2020 can be used with all modes of transport, including multimodal shipping. The most common method is road transport, which allows for delivery directly to the buyer’s warehouse. Sea container shipping is also widely used, followed by transport to the final destination. For urgent or high-value cargo, air freight may be the best option.
Advantages of DAP for Buyer and Seller
DAP shipping offers benefits to both buyers and sellers. For buyers, the main advantage is minimizing logistical efforts, as the goods are delivered directly to their chosen location. This also reduces the risk of cargo damage during transit. Logistics under this term are transparent, as the buyer knows the exact delivery cost in advance.
For the seller, DAP allows them to control the transportation process up to the delivery point, after which their obligations end—though they can offer the buyer a full-service package if desired.
Risks and Common Issues
Despite its benefits, using Incoterms DAP has certain risks. Although the seller is responsible for the goods until delivery, unforeseen circumstances can cause issues. Delays at customs due to missing documents can result in extra costs. It’s also important to clarify who pays for unloading, as this often becomes a point of dispute between parties.
What to Consider When Signing a DAP Contract
To avoid misunderstandings, the contract must clearly specify the exact DAP delivery location — whether it’s a warehouse, customs terminal, or a specific address. It’s essential to define who is responsible for unloading and who will cover the costs. Extra time should be allocated for customs clearance to avoid delays. Also, clarify who is responsible for insuring the cargo throughout the transportation process.
When to Choose DAP Terms
DAP is ideal for delivery to countries with well-functioning customs systems where delays are minimal. It’s also a great option for companies just starting in international logistics, as it’s relatively simple to manage. On the other hand, DAP should be avoided for deliveries to regions with complicated customs regulations, where clearance can be a serious challenge and requires experienced logisticians.
In summary, DAP is a convenient option for international deliveries but requires thorough planning and agreement on all contract details. A well-drafted agreement and collaboration with a reliable logistics partner — such as ETS — helps minimize risks and avoid misunderstandings.