DAP delivery terms, 08 stumbling blocks for an exporter

DAP, Disadvantages from seller’s point of view

We are trying to bring your attention on the pros and cons of each delivery term from bother importer’s and exporter’s point of view under different posts in this website. 

Now under this post, we would like to share our thoughts on demerits of DAP to an exporter. What are the disadvantages for an exporter when he contracts his carriage terms on DAP basis? Let us discuss one by one below:

01.One of the disadvantages for seller is that in a DAP delivery terms, the risks of seller involved in movement of goods is high.  In an export import trade, the exporter is liable to deliver goods at named final destination of importer at importing country by undertaking local transportation in exporting country, export customs clearance, export port handling, main carriage, on carriage risks and costs in buyer’s country etc. This is a drawback for exporter when contract of movement of goods are on DAP basis in international trade.


02. Under DAP terms of delivery, since the importer undertakes import customs clearance costs and risks, the delay in obtaining import license or delay in meeting import government requirements make delay in completing import customs clearance process at buyer’s country.  As the on carriage is under the liability of exporter under DAP terms, he has to wait importer to complete import customs clearance process to arrange further movement of on carriage to named destination. This is a demerit for exporter under DAP delivery terms.

03. One of the other drawback for seller under DAP delivery rules is that the seller invests more amounts in movement of goods.  Except advance payment under sale of goods, the exporter gets back  his amount under sale of his goods later as per mutually agreed payment terms,

04. Under DAP rules of delivery in an international business; the exporter should be well conversant with government rules and regulations of exporting country to export his product, the costs and risks involved under export customs clearance.  An inexperienced exporter or his freight forwarder may face more difficulty in handling such process results the costs hikes than anticipated. This is another drawback for seller when delivery terms are on DAP basis.

05. If the exporter under DAP terms or his agent fails in proper handling of local transportation under pre carriage, the additional costs may occur which could lead to hike costs than anticipated when contracting. This is another disadvantage for seller under DAP terms of delivery.

06. One of the other demerit under DAP terms for exporter is that the safety of goods is to be taken care till the named destination place under DAP and the exporter is liable for any damage or loss of goods till delivery of goods to importer under international business.

07. If the seller fails to appoint a right freight forwarder, the costs and risks under DAP delivery rules may shoot up thereby, the additional costs and burden for exporter might be faced.  This is another drawback for an exporter under DAP delivery rules to move goods from seller’s place to buyer’s place.

08. Another drawback under DAP delivery terms for exporter is that; since the buyer is responsible in unloading the goods under DAP terms, the exporter does not have control over unloading goods at named destination, thereby the safety of goods while unloading cannot be monitored for exporter.

 The above disadvantages under DAP are from seller’s perspective.

You may add your comments about the difficulties facing by an exporter when he delivers goods on DAP basis in export import business:

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