Delivered At Place (DAP) is an international trade term, also known as an Incoterm, that outlines the seller’s responsibilities for delivering goods to the buyer at a specified destination, typically the buyer’s premises or another agreed-upon location. DAP indicates that the seller fulfills their obligation when the goods are made available to the buyer for unloading at the agreed-upon destination, but the seller does not bear the risk of loss or damage after delivery.
Key points related to Delivered At Place (DAP) in supply chain and international trade:
- Delivery Point: Under DAP terms, the seller’s responsibility is fulfilled when the goods are delivered to the buyer at the agreed-upon destination. This could be the buyer’s premises, a warehouse, or another designated location.
- Transportation Responsibility: The seller is responsible for arranging and paying for the main carriage (transportation) of the goods to the agreed-upon destination. This could involve multiple modes of transport, such as land, sea, air, or a combination.
- Risk Transfer: The risk of loss or damage to the goods shifts from the seller to the buyer upon delivery of the goods at the agreed-upon destination.
- Cost Allocation: The seller covers the costs of transporting the goods to the agreed-upon destination. The buyer is responsible for all subsequent costs, including unloading, customs duties, taxes, and any charges associated with the goods after delivery.
- Applicability: DAP terms are often used when the buyer wants the seller to handle transportation to a specific destination, but the buyer is responsible for unloading and further distribution.
- Documentation: The seller is responsible for providing the necessary export documentation and other documents required for transportation, customs clearance, and delivery.
- Risk and Control: The buyer assumes the risk once the goods are delivered at the agreed-upon destination. The buyer also has control over the unloading process and subsequent distribution.
- Clear Communication: Precise communication between the parties is crucial when using DAP terms to ensure a shared understanding of the delivery point and responsibilities.
DAP is one of the Incoterms that help define the terms of delivery, risk, and responsibility between buyers and sellers in international trade. The choice of Incoterm, such as DAP, plays a significant role in allocating costs and risks appropriately and ensuring a smooth international trade transaction.
Seller’s Responsibility Under DAP
- Goods delivery
- Packaging and marking
- Transportation in the country of origin
- Transportation in the destination country
- Customs handling fees and charges in the country of origin
- Charges in the destination country
- International freight
Buyer’s Responsibility Under DAP
- Goods payment
- Duties and taxes payment
- Customs handling fees in the destination country
Insurance in DAP
Under the DAP Incoterm, neither party is required to provide cargo insurance. However, most sellers exporting under DAP prefer to obtain insurance because of their major responsibility. They may just cover the areas for which they are responsible. However, it is more probable that they provide insurance for the entire journey from beginning to end.
Make sure the insurance terms and conditions are included in the sales contract when arranging insurance under DAP.
