DAP terms, easily explained

Posted on 04 January 2019 Category : Inco Terms

The information provided here is part of Export Import Training online

What is DAP terms in shipping? How does DAP work ?

DAP terms of shipping has been introduced in 2010. Before 2010, DDU had been used almost similar to the functions of DAP. However, DDU is used even now among some traders.

What is DAP?

DAP means, Delivered at Place ( up to the named destination mentioned). In a DAP terms, the seller delivers goods up to the destination mentioned in contract agreed mutually.

The terms DAP can be used in any mode of transport.

Inco Terms 2010 defines DAP as “Delivered at Place” that the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination.

When does the risk passes from seller to buyer under DAP terms?

Under DAP terms, the risks passes from seller to buyer from the point of destination mentioned in the contract of delivery by seller.

For easy understanding the term DAP, once again let me explain in simple language below:

Once goods are ready for shipment, the necessary packing is done by seller at his on cost, so as to reach the material up to final destination safely. The materials are moved to customs location opted by seller at exporting country at his own expenses under DAP. All necessary legal formalities in exporting country is completed by seller at his own costs and risks to move the goods to destination mentioned in DAP. Apart from necessary customs clearance procedures and formalities at exporting country, the insurance up to the destination mentioned in DAP terms is arranged by seller at his own costs and risks. In a DAP terms, necessary carriage expenses with any terminal expenses are paid by seller up to the destination mentioned. The necessary unloading cost at final destination has to be borne by seller under DAP terms, if specifically not mentioned in contract. If unloading expenses can not be met by seller, better terms of shipping can be DAT (Delivered at Terminal of place mentioned)

Once after arrival of goods at destination mentioned in DAP terms, the customs clearance at importing country needs to be completed by the buyer at his own cost and risk. Transportation from the point of destination mentioned in DAP terms to final destination of buyer, need to be undertaken by seller at his own cost and risks.
So under DAP terms of shipping, the seller meets all expenses and risks to deliver the goods up to the destination mentioned in the contract. From such point of location mentioned in DAP terms, the buyer undertakes all risks and responsibilities to reach the goods at his premises at his own expenses.

Detailed articles about Inco Terms of Delivery under export and import of International business have been mentioned in separate category – INCO TERMS – in this web site. You can click here to read.

I hope, I could clarify DAP shipping term easily understand. If you have different thought on DAP terms of shipping, please opine below.

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Comments

Seyed Jalal: On 16 February 2014 Dear Mr. Kollerath, thanks for this article. that was really useful for me but there is a question here! who should bear with shipment costs from customs to warehouse of buyer at final destination in DAP? Seller or buyer should pay such costs? please help me to know that! Best Regards

Mohamed Adel: On 12 November 2014 Thanks for above , i just need to understand whether customs clearance in importing country will be on expenses of seller or buyer

Debraj : On 19 February 2015 I am Debraj sardar from kolkata,west bengal, i want to learn export import busness so that i have been browsing your web site last two month. i have a question that which is best secret way for goods delivery and payment ?--

Suresh Ruparel : On 19 February 2015 We are likely to get a software related services export order to USA which we are unable to make.We have tried to outsource this project to a party overseas.How can we declare ourselves as Merchant Exporter and complete the transaction?The payment to outsourcing person will go to overseas.The payment from final client will come to India from USA.Please guide us. I am ready to pay any charges if any.

harish: On 20 March 2015 dap trums who well pay the custom duty

Shailesh Zala: On 30 June 2015 Dear Sir, we import shipmnet from Germany and Inco Terms is DAP. so kindly give suggestion is it custom clearance compulsory or not. if compulsory who is cleared the cargo. await for your valuable reposnce.

Mintesnot tadesse: On 03 February 2016 Who is paid customs duty and tax?

Arlen Costaine: On 12 August 2016 Can you please tell me about the import term "DAP" what does this mean?

Liene: On 06 January 2017 Hi, If terms are DAP, does the freight charges has to be shown in Commercial Invoice (included in the total of the Invoice) for VAT and Duty purposes?

Serj: On 23 July 2017 Hello, "Transportation from the point of destination mentioned in DAP terms to final destination of buyer, need to be undertaken by seller at his own cost and risks." By seller or the buyer? "the insurance up to the destination mentioned in DAP terms is arranged by seller at his own costs and risks." The seller is not under any obligation to arrange the insurance under the DAP terms. Is he?

Tul: On 05 January 2018 I concur fully with Serj. There must be a msistake in that sentence and it must be read as "Transportation from the point of destination mentioned in DAP terms to final destination of buyer, need to be undertaken by BUYER at his own cost and risks." As responsibility ends at DAP point. If DAP point happens to be the final destination such as the buyer's factory all the transport up to that factory is paid by the shipper and the buyer only covers and performs unloading of the trucks. If the DAP point happens to be a port, transport from port to factory is on buyer's account + if we talk about containers I think unloading (unstuffing) of the containers are also on buyer's account at DAP point. If anybody thinks this is wrong please comment.

Martin: On 04 April 2019 To keep it simple for you plebs: Seller of goods pays: Packing Labelling All Freight (to point of delivery agreed with buyer) Buyer of goods pays: Unloading Customs Clearance Duties & Taxes You as a seller are responsible for all transportation costs to the point of delivery and no further than that, all further transportation costs or unloading costs and such is the burden of the buyer to pay.