Difference between DAP and DDP.

Posted on 10 April 2023 Category : For Beginners

The information provided here is part of Online Export Import course

The Buyers and Sellers are suggested to use Incoterms 2020, the latest version of delivery terms for movement of goods. Click here to read the extract of Inco Terms 2020, easily explained.

DIFFERENCE BETWEEN DDP and DAP

What is the difference between DDP and DAP. Is there any difference between DAP and DDP under Inco terms?

Let us find out What is DAP and What is DDP terms used in international business.

How does DAP work in export import trade?

The meaning of DAP means Delivered At Place. DAP is followed by a place. For example, DAP New York means Delivered at Place New York.

I will explain DAP terms of delivery with a simple example. You are a Machinary seller situated near Mumbai, India. The buyer is situated in Newyork. You are the seller of goods and you have contracted with the buyer and agreed to sell the goods on DAP New York price of USD 6050. Here the selling cost of goods is USD 6050 DAP New York. You (the seller) arrange to carry the goods to Mumbai port, meet expenses including customs clearance in Mumbai, pays the ocean freight or airfreight up to New York, appoint a freight forwarder to customs clear the cargo at New York and deliver the goods at the door step of buyer’s place . In other words, as per DAP terms of delivery, all delivery expenses up to the place of buyer's place New York is borne by the seller except duty or tax of importing country. You can read more about DAP terms here.

What is DDP terms in an export Business?

The term DDP means, Delivery Duty Paid or Door delivery Duty Paid. In other words, the selling cost includes all expenses including duty or tax up to the buyer’s place.

I will explain DDP terms of delivery with a simple example. You are a Machinary seller situated near Mumbai, India. The buyer is situated in Newyork. You are the seller of goods and you have contracted with the buyer and agreed to sell the goods on DDP New York price of USD 6250. Here the selling cost of goods is USD 6250 DDP New York. You (the seller) arrange to carry the goods to Mumbai port, meet expenses including customs clearance in Mumbai, pays the ocean freight or airfreight up to New York, appoint a freight forwarder to customs clear the cargo at New York and deliver the goods at the door step of buyer’s place by paying any tax or duty of importing country . In other words, as per DDP terms of delivery, all delivery expenses up to the door step of buyers place in New York is borne by the seller including duty or tax of importing country. In DDP terms, insurance has to be arranged by the seller, as DDP price includes the cost of insurance also. Click here to read more about Inco Terms DDP.

I hope, I could clarify the difference between DAP and DDP terms with simple example. Did you like this article. Please let me have your opinion below.

The above information is a part of Export Import Online Tutorial

The Buyers and Sellers are suggested to use Incoterms 2020, the latest version of delivery terms for movement of goods. Click here to read the extract of Inco Terms 2020, easily explained.

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Comments

khalid shaikh: On 13 June 2013 Excellent demonstration by example above. Kindly add more terms with the same style above.

Mohammad Tamjidzad: On 10 August 2013 I would like to thank you for such a simple and perfect explanation. Best regards M. Tamjidzad

GINNY: On 17 September 2013 We are the importer in Taiwan and our customer (in Taiwan) likes to buy truck from us and de0livery this truck from Germany to France to install the equipment. Then, our customer will import truck from France to Taiwan by themself. We (importer) will sell the truck (made in Germany ) and delivery to France to our customer. What incoterms we should use ? Can we use DDP XXXX FRANCE ? Or any alternative ? And what kind of document we should get from Truck manufacturer (in Germany) ? Invoice + packing list + Cargo Receipt (?). It only needs land transport. Looking forward to receving your reply by return. Thanks in advance. Best regards/Ginny

Kevin Hung : On 09 November 2013 Very helpful and easy to understood. thank you.

Lin Min: On 28 November 2013 Thanks for your Explanation .I wonders now is CIF and DDP is whether same or not .What is the main difference things.

Susan : On 20 December 2013 Hi, Wanna to know is the DDP in USA included State Sales Tax in USA? Appreciate your reply.

Bob: On 10 January 2014 A supplier is claiming they can not supply on DAP terms if payment terms are based on B/L date. I feel these are unrelated but I wanted to check. Any insights?

Veeravenkatarao Ankem: On 30 January 2014 Very useful to new importers

Mahesh Bhavsar: On 06 February 2014 Who has to bear insurance charges in DAT Terms?

ROBERT JOSEPH: On 18 February 2014 Very useful and clear explanation with examples. Thank you.

Fahad: On 26 March 2014 Excellent article. Thanks a lot.

Jino Prasad: On 17 September 2014 Excellent Explanations and briefing with good and simple examples; Really very useful and continue with lot. Thank you

Sky: On 30 September 2014 Very Use Full Thanks

alyn: On 22 October 2014 I'm the buyer that has agreed that the seller will arrange the international shipment to the mentioned address and the freight cost will be added on top of the goods cost in the invoice. it means that the buyer who is actually paying for the freight cost. but in the contract they put it as DAP. does DAP is the correct term for this situation?

Vishal: On 01 July 2015 You have very clearly addressed the difference between DAP and DDP. This information is very useful and very helpful to Exporters. Thank you.

LMM: On 08 September 2015 We are a mexican company based in Mexico City and have a purchase with an american company (Tulsa). How does an equipment bought (certain part of this Purchase order) in Mexico may be delivered if we are using DAP? Does it have to go to the border to pay taxes and then reimported in Mexico?

Kamran Khan : On 14 October 2015 I am a regulare reader of your portal and I am situated in Mumbai and currently got a placement in a logistic freight forwarding company in Import department. I am actually finding bit difficulty in understand the DDP, DAP, EXW shipment step by step procedure to follow . While handling such shipments.

Ashish: On 05 December 2015 Dear Sir, As per my knowledge Duty drawback is always on FOB value and Import duty is always on CIF value. So in this case if I want to do business on DDP terms how should I make Invoice ? Can I make one invoice with breaking all the cost like FOB , CIF and DDP ? Because I have to take Drawback on FOB value and I have to pay import duy on behalf of customer on CIF value since my term of doing business is DDP. but by simply mentioning DDP cost in Invoice I will take high duty drawback and will pay high import duty since my total cost includes considerable part of Door delivery cost.

David Joseph.: On 29 January 2016 Surely yet it is simple and clear to understand.Good instructor. Keep it to knowledge many.

Swathi: On 17 March 2016 nice explanation with example ...

Eddie Sabuwa: On 16 August 2019 Excellent demostrations by examples above and easily understood.

Dennis Tukak: On 04 February 2023 Why is letter of credit often not accepted by sellers if they face a new buyer? What are the risks? What is the best alternative?