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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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