DAP, Benefits from seller’s point of view
This is one of the web posts among many when deeply researching each delivery terms under Incoterms 2020, both from sellers and buyer’s corner.
Here we are chewing over the advantages to an exporter when he agrees contract of carriage on DAP basis.
Here are they, one by one:
01.One of the main advantages under DAP for seller is that in an export import business, since the exporter carries more risks and costs for movement of goods to destination named place under DAP terms of delivery, he keeps more profit margin under sale of goods.
02. Under DAP terms of delivery, the costs to deliver goods to the buyer is high in turn, the invoice value of sale of goods would be more resulting more turnover to get foreign currency. This helps an exporter for availing export incentives against foreign inward remittance, if offered by many countries to boost exports. This is an advantage for exporter when contract of carriage is on DAP basis in export import trade.
03. Another advantage under DAP for exporter is that in a DAP delivery rules, exporter gets chances to learn more about export government rules and regulations in his country. The exporter becomes familiar with those export process and he can easily handle similar business transactions, resulting to increase his volume of business.
04. Since the exporter undertakes pre carriage process under DAP terms, he gains sound knowledge and experience in handling local transportation which can be utilized for similar buyers. This is a benefit for exporter when contract of delivery terms is on DAP basis.
05. One of the other advantages under DAP for exporter is that the exporter can ensure safety of goods, as he is the authority to handle pre carriage, main carriage and on carriage under DAP terms of delivery.
06. Under DAP delivery terms, the risks and costs involved for unloading of goods at final named place is under the liability of buyer thereby the seller is free from such liability. This is a merit for exporter when delivery rules are on DAP terms.
07. The cost calculation at each point of movement of goods can be ascertained by an exporter under DAP terms. Say, the total costs involved for pre carriage, export customs clearance charges, export port handling charges, freight involved against main carriage, expenses against on carriages etc. This will help exporter for gaining better experience and knowledge in costing of his product for offering better selling price to his buyers under DAP delivery rules. This is an added benefit for exporters when contract of movement of goods is on DAP basis.
08. One of the other advantage under DAP terms for exporter is that under DAP delivery rules, the exporter gets opportunity to appoint a best Freight forwarder, and thereby he can ensure the best service provided to move goods to satisfy his buyers for strengthening business relationship.
09. Under DAP terms, the maximum control over movement of goods is with the exporter and he holds the right to get various shipping information, cargo movement tracking, and other data related to shipping from shipping companies, transport authorities and other carriers at all points of movement of goods; pre carriage, main carriage and on carriage. This is an advantage for seller under contract of carriage on DAP basis.
Have you been convinced about the advantages to buyers under DAP terms of delivery?
Share below your experience in handling DAP and comment below your addition from exporter’s point of view.