Delivered-at-Place (DAP)

Definition

Delivered-at-Place (DAP) is an Incoterm that places responsibility on the seller to deliver goods to an agreed destination and bear all costs and risks of transport up to that point. The buyer assumes responsibility once the goods arrive at the named place, including unloading, import clearance, duties, and taxes. DAP was introduced in the 2010 edition of the International Chamber of Commerce’s Incoterms and replaced the older term DDU (Delivery Duty Unpaid).

How DAP works

• DAP applies to any mode or combination of transport.
• The seller arranges and pays for export formalities, pre-carriage, main carriage, and delivery to the specified place (e.g., “DAP, Port of Oakland”).
• The seller bears risk of loss or damage during transit until delivery to the named place.
• The buyer is responsible for unloading the goods, completing import formalities, and paying import duties, taxes, and any local charges once the goods arrive.

Seller obligations

Under DAP, the seller must:
– Prepare and provide required export documentation (commercial invoice, packing lists, etc.).
– Obtain export licenses and handle export customs formalities.
– Arrange and pay for packing, pre-carriage, main carriage, and delivery to the agreed place.
– Bear the risk and cost of any loss or damage up to the delivery point.
– Provide proof of delivery to the buyer.

Buyer obligations

Under DAP, the buyer must:
– Pay the seller for the goods as agreed.
– Provide information about the destination and any requirements needed for delivery.
– Unload the goods at the named place.
– Complete import formalities and pay import duties, taxes, and levies.
– Arrange onward transport after unloading (to warehouse, retail location, etc.).

DAP vs DDP

• DAP (Delivered-at-Place): Seller covers delivery to the named place and bears risk until then; buyer handles unloading and import clearance, including duties and taxes.
• DDP (Delivered Duty Paid): Seller assumes all responsibilities, costs, and risks including import duties, taxes, and customs clearance. DDP places the maximum obligation on the seller.

Common disputes and issues

• Demurrage: Charges for delays in unloading can arise if import clearance is not completed on time. Responsibility depends on which party failed to provide required documentation or authorization.
• Documentation and local rules: National and port-specific documentation requirements vary, which can create confusion over who must provide certain documents or approvals.
• Determining the exact delivery point: Contracts should specify the precise place of delivery to avoid ambiguity about when risk and cost transfer.

Importance of Incoterms

Incoterms standardize the allocation of costs, risks, and responsibilities between buyers and sellers in international and domestic trade. Using a clear Incoterm like DAP in a contract helps avoid misunderstandings and provides a common reference for which party handles each aspect of the transaction.

Key takeaways

• DAP requires the seller to deliver goods and bear transport risk up to the named place; the buyer handles unloading and import clearance.
• It applies to any mode of transport and replaced DDU in Incoterms 2010.
• For greater seller responsibility, choose DDP; for more buyer responsibility on import clearance and duties, choose DAP.
• Clearly specifying the exact delivery location and required documentation in the contract reduces the risk of disputes.