DAP (Delivered at Place) Buyer’s Premises

DAP (Delivered at Place) is a shipping term under the Incoterms rules, where the seller is responsible for delivering goods to a specified location, which is usually the buyer’s premises or another agreed-upon destination.

According to the DAP incoterms definition, the seller takes care of all transportation costs and risks until the goods reach this final destination. However, the buyer is responsible for importing, customs clearance and unloading the goods once they arrive.

DAP applies to various modes of transport, including sea, air, road and rail freight. It replaces older incoterms like DAF, DES and DDU. Under DAP, the seller’s obligations end when the goods reach the designated place and from that point onwards, the buyer assumes all risks and costs. This rule is especially useful for land-based trade within regions like Europe but may encounter challenges when different modes of transport are involved.

-A1 : Provide Goods and Documentation Related Rules

The seller must provide the goods and their commercial invoice, along with any other necessary documents, such as certificates of analysis, in either paper or electronic form.

-A2 : Delivery Related Rules

The seller is responsible for delivering the goods to the agreed destination. However, the seller is not required to unload the goods from the transport vehicle.

-A3 : Transfer of Risk Related Rules

The seller bears the risk of loss or damage to the goods until they have been delivered to the specified location.

-A4 : Carriage Related Rules

The seller must arrange and pay for the carriage of goods to the named destination, including costs incurred during transit.

-A5 : Insurance Related Rules

The seller is not obligated to insure the goods during transit despite bearing the risk until delivery.

-A6 : Delivery Document Related Rules

The seller must provide the buyer with the necessary documents to take possession of the goods.

-A7 : Export or Import Clearance Related Rules

The seller is responsible for obtaining any export clearances required by the exporting country and for clearing the goods through any transit country.

-A8 : Checking, Packaging or Marking Related Rules

The seller must ensure that the goods are properly packaged, checked and marked for transport.

-A9 : Allocation of Costs Related Rules

The seller covers all costs related to transport, export duties and clearance fees until the goods are delivered to the destination.

-A10 : Notices Related Rules

The seller must notify the buyer of the delivery and provide the necessary information for the buyer to receive the goods.

-B1 : Payment Related Rules

The buyer must pay for the goods as agreed upon in the sale contract.

-B2 : DAP Delivery Conditions

The buyer is responsible for delivering the goods once they are delivered to the agreed destination.

-B3 : Transfer of Risk Related Rules

Once the goods are delivered, the buyer assumes the risk of any loss or damage.

-B4 : Carriage Related Rules

The buyer has no obligation to arrange a carriage under DAP.

-B5 : Insurance Related Rules

The DAP Incoterms insurance responsibility does not lie with the buyer once the goods are delivered.

-B6 : Transport Document Related Rules

The buyer must accept the transport documents provided by the seller.

-B7 : Export or Import Clearance Related Rules

The buyer must handle and pay for any import clearance requirements in the destination country, including duties, permits and security clearances.

-B8 : Checking or Packaging Related Rules

The buyer does not have any obligations to the seller regarding packaging and marking unless otherwise agreed.

-B9 : Allocation of Costs Related Rules

The buyer is responsible for any unloading costs, import duties and taxes after the goods have been delivered.

-B10 : Notices Related Rules

The buyer must notify the seller of the required delivery time and location, as specified in the contract.

-Clear Responsibility for Additional Costs- The buyer knows who is responsible for extra shipping expenses. The buyer takes over responsibility once the goods are delivered, while the seller handles all costs before delivery.

-Reduced Risk for Buyers- DAP lowers the buyer’s risk by making the seller responsible for shipping until the goods arrive. This allows the buyer to avoid potential transportation risks.

-Cash Flow and Inventory Management- Buyers can manage their cash flow better since they only pay when the goods arrive. This is especially helpful for expensive items that need regular reordering.

-Efficiency of Reordered Products- Sellers can ship items to bonded warehouses near the buyer's location. This allows buyers to reorder smaller quantities faster without waiting for long-distance shipments.

-Customs Delays: The buyer is responsible for customs clearance, which can cause delays. Any waiting time for customs clearance can lead to extra costs for the buyer.

-Higher Overall Costs: Since the seller handles most of the shipping responsibilities, DAP can result in higher shipping costs for the buyer compared to managing their own logistics.

-Seller’s Risk with Import Duties: Sellers face the risk of buyers not paying import duties. This can result in the seller losing the shipment, especially when dealing with new buyers.

-Potential Delays in Delivery: If customs clearance is delayed, the buyer may experience extended wait times before receiving the goods, which can affect operations.

DAP (Delivered at Place) agreement is typically used in trade when both the buyer and seller want a flexible shipping arrangement that benefits both parties. It is particularly useful for less experienced importers who want to minimise risks, as the seller handles most of the shipping responsibilities. However, buyers should be aware of potentially higher costs compared to other Incoterms like FOB or CIF.

AP is also ideal when the named place of delivery is the buyer's warehouse, allowing them to pay for the goods only upon arrival. This helps improve cash flow by avoiding the need to tie up capital in inventory during shipping. Additionally, DAP can be a creative solution for buyers managing shipments across multiple countries, as it allows for efficient consolidation and transshipment.

DAP (Delivered at Place) offers a structured approach to international trade, balancing responsibilities between buyers and sellers. It provides buyers with the security of knowing that the seller will deliver the goods to their specified premises, reducing transportation risks and simplifying logistics.

Sellers benefit from a clear delineation of responsibilities, allowing for efficient planning and cost management. DAP offers flexibility and streamlined operation, especially for inexperienced importers or direct shipments. Overall, DAP is a valuable term that promotes clarity, efficiency and risk management in global trade.

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-Under delivered at place Incoterms, who is responsible for moving goods that have already arrived at the airport or port and need to be brought to the final destination?

As per the DAP Incoterms, the seller’s shipping company is responsible for handling arrived goods at ports and ensuring they are brought to the final destination.

-Under delivered at place Incoterms, who is responsible for damaged or lost goods before they are delivered to the buyer?

As per the DAP Incoterms, the seller is responsible for damaged or lost goods before they are delivered to the buyer.