When shipping internationally, choosing the right Incoterm can make or break a transaction. One of the most commonly used, yet often misunderstood, is Incoterm DAP. Whether you’re a buyer or a seller, understanding this term is crucial for avoiding delays, unexpected charges, and disputes.
In this guide, we’ll break down what Incoterm DAP means, who’s responsible for what, and when it’s the right choice for your shipment.
1.What Does Incoterm DAP Stand For?
DAP stands for “Delivered at Place.” Under this Incoterm, the seller is responsible for delivering the goods to a named location in the buyer’s country. This location can be the buyer’s warehouse, a port, or any other agreed-upon place.
The risk and responsibility transfer from the seller to the buyer once the goods arrive at the named place and are ready for unloading.
2.Who Is Responsible Under Incoterm DAP?
| Responsibility | Seller | Buyer |
|---|---|---|
| Export customs clearance | Yes | No |
| Origin terminal charges | Yes | No |
| International freight | Yes | No |
| Destination terminal handling | Yes | No |
| Delivery to final place | Yes | No |
| Import customs clearance | No | Yes |
| Duties & taxes | No | Yes |
| Unloading at destination | No | Yes |
Under Incoterm DAP, the buyer is responsible for import customs clearance, taxes, and unloading, while the seller handles everything up to the point of delivery.
3.Example of a DAP Shipment
Let’s say a company in China is selling electronics to a retailer in Germany. The two parties agree on DAP – Berlin Warehouse.
- The Chinese seller books the freight, handles export paperwork, and transports the goods all the way to the warehouse in Berlin.
- Once the goods arrive and are ready to unload, the German buyer takes over.
- The buyer handles import clearance, pays duties and taxes, and unloads the goods.
This setup gives the buyer minimal shipping responsibilities, while the seller controls the logistics.
4.Benefits of Using Incoterm DAP
Buyers don’t need to deal with overseas logistics or freight booking.
Sellers manage the supply chain and can select trusted logistics providers.
Any named place can be agreed upon – not limited to ports.
Especially in Europe and North America.
5.Risks and Considerations
Buyers must be capable of handling customs and duties in their country.
The buyer is in charge of unloading; unexpected costs can arise.
If the named place is not clearly defined, disputes can happen.
6.When to Use Incoterm DAP
Incoterm DAP is ideal when:
- The buyer lacks international shipping experience.
- The seller prefers to control shipping and ensure timely delivery.
- The shipment is door-to-door, but without the seller covering import taxes (in that case, use DDP).
7.DAP vs DDP: What’s the Difference?
| Term | Who Pays Import Duties & Taxes? | Who Handles Delivery? |
|---|---|---|
| DAP | Buyer | Seller |
| DDP | Seller | Seller |
Key difference: Under DAP, the buyer handles import customs and pays duties; under DDP, the seller covers everything, including those costs.
Final Thoughts
Incoterm DAP offers a great balance of responsibilities in international trade. It’s especially useful for buyers who want the goods delivered close to home without managing the shipping process—but still want control over customs.
If you’re working with a reliable freight forwarder, DAP can simplify your operations and reduce risk, provided both parties understand their roles.
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FAQ:
Q1: Does Incoterm DAP include unloading?
No, unloading at the final destination is the buyer’s responsibility.
Q2:Who pays customs duties under DAP?
The buyer pays all import duties and taxes.
Q3: Can DAP be used for sea and air freight?
Yes, Incoterm DAP is suitable for all modes of transport.
Q4: What if the buyer fails to clear customs?
The seller has fulfilled their obligation once the goods arrive at the agreed place. The buyer must manage clearance.