Delivered-at-Place (DAP) is an internationally recognized trade term (Incoterm) defined by the International Chamber of Commerce. This Incoterm signifies an arrangement whereby the seller is responsible for all costs and risks associated with delivering the goods to a specified destination, which is typically the buyer’s location. This term facilitates smooth international trade by clearly delineating the responsibilities and liabilities between the seller and the buyer.
How Delivered-at-Place (DAP) Works
Under the DAP arrangement, the seller undertakes most of the logistical responsibilities. This includes packaging, export customs clearance, and transportation to the agreed-upon destination. However, once the goods arrive at the destination, the risk shifts to the buyer. Here’s a breakdown of each party’s obligations:
Seller’s Responsibilities
- Packaging and Labeling: Ensuring that the goods are suitably packed and labeled.
- Customs Clearing: Handling export customs processes and ensuring that goods pass border controls.
- Transport: Arranging and paying for the main carriage to the designated delivery place.
- Risk-Bearing: Assuming the risk of loss or damage during transport up to the delivery point.
Buyer’s Responsibilities
- Import Customs Clearance: Handling the import customs formalities, including paying any import duties and taxes.
- Unloading: Responsible for unloading the goods once they reach the delivery place.
- Additional Local Transport: Arranging further transport requirements after the delivery point, if needed.
Types and Special Considerations
Different scenarios may affect how DAP is applied, particularly concerning the nature of the goods being transported and specific international trade agreements in place:
Normal Shipments
- Bulk Goods: Might require special handling and insurance.
- Perishable Items: Consideration must be given to their limited shelf life and necessity for refrigeration during transit.
Special Considerations
- Insurance: While insurance is not explicitly required under DAP rules, it is prudent for either party to consider obtaining adequate coverage.
- Regulatory Compliance: Adherence to local import regulations, including safety and environmental standards, is crucial.
Examples of Delivered-at-Place (DAP)
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Electronics from China to the USA: A company in the US orders electronics from a supplier in China. The supplier covers all costs up until the electronics reach the US company’s doorsteps. The US company only handles the import duties and unloading.
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Automobile Shipment within EU: A German car manufacturer ships vehicles to a dealership in France. The manufacturer ensures the cars are delivered to the dealership location, where the dealership then manages the unloading and local formalities.
Historical Context
The term ‘Delivered-at-Place’ was introduced in the Incoterms 2010. These terms are periodically reviewed and revised by the International Chamber of Commerce to reflect changes in global trade practices.
Applicability
DAP is particularly beneficial in international trade, simplifying the seller’s responsibilities while giving the buyer clarity on logistics and cost expectations up to the point of delivery.
FAQs
What does the seller’s responsibility entail in DAP?
When does the risk transfer from seller to buyer in DAP?
Do Incoterms like DAP apply to domestic shipments?
Related Terms
- Incoterms: Series of predefined commercial terms published by the International Chamber of Commerce.
- FOB (Free on Board): Another Incoterm where the seller’s obligations end once goods are placed on board the vessel chosen by the buyer.
- CIF (Cost, Insurance, and Freight): Incoterm where the seller assumes responsibility and costs up to the destination port, including insurance.
This comprehensive overview ensures that readers get an in-depth understanding of Delivered-at-Place (DAP), its operational dynamics, historical context, and practical applications.
