Incoterms Explained: Delivery at Place (DAP)
When goods are bought or sold “Delivery at Place” (DAP) it means that the Seller delivers the goods to a place previously agreed to by the seller and the buyer. This can be any location. The agreed place of delivery (e.g. the terminal) needs to be specifically named. The buyer then takes care of the import formalities and transportation to the final destination. It is very similar to Delivery at Terminal (DAT).
Risks and Costs for the Seller
The seller is responsible for arranging and paying for transportation to a place agreed to by both the buyer and the seller. The risk transfers to the buyer right before the goods are unloaded at the agreed-on place. This is an important difference with DAT, where the Seller is responsible for unloading. The agreed-on place can be a terminal at a port, a roadside terminal, or the buyer’s premises. If there are delays before the goods have cleared customs, the seller is responsible for any cost incurred, unless otherwise agreed.
Risks and Costs for the Buyer
The buyer is responsible for unloading the goods and any further transportation. The buyer is also responsible for arranging and paying for any import documents and taxes. The seller is obligated to hand over any documents or information needed to enable the successful import, at the cost of the buyer. Import duties and taxes also need to be paid by the buyer.
Potential Issues for the Seller
Because risk is transferred to the buyer once the shipment is handed over at the destination terminal, the seller is responsible for the loss of or damage to the shipment. This means the seller is responsible for insuring the shipment, or paying for the loss if anything goes wrong.
Potential Issues for the Buyer
As the seller is arranging transportation, he will charge these costs to the buyer. If he can charge all costs to the buyer, he may have little incentive to keep transportation costs low. This means a relatively higher end-cost for the buyer, compared to when the buyer arranges transportation of the shipment.
Use of Delivery at Place
DAP can be used for any mode of transport.
CIP Under Incoterms 2020
The new Incoterms 2020, which were launched earlier this year by the ICC go into effect on January first. The Incoterms 2010, which you can find in our earlier post here, will still be valid. As long as both parties agree to the terms, they are. There are no changes to Delivery at Place under the Incoterms 2020.