What is Delivered at Place or DAP?

Delivered at place (DAP) is a delivery agreement whereby the seller agrees to pay all transport and delivery costs associated with moving the goods to a location specified by the Buyer. The buyer is responsible for any import duties and taxes that may be levied on the goods once they arrive at their destination.

DAP agreements are typically used for deliveries of large or heavy items that cannot be delivered to the buyer’s doorstep, or for international shipments where the buyer wants to have greater control over when and where their goods are delivered.

Delivered at place dap is a delivery method where the seller agrees to deliver the goods at a specific location agreed upon by the buyer. This delivery method is commonly used for large and/or heavy items that cannot be easily delivered to the buyer’s doorstep.

Delivered at place dap is often used for international deliveries, as it allows the buyer to have greater control over when and where their goods are delivered. As an international trade term, DAP is used for describing a deal in which sellers agree for paying all the costs and suffering any potential losses of moving goods sold to a location given by the buyers.

International chamber of commerce rules for DAP suggest that the seller is responsible for delivering the goods to the buyer at the destination mentioned in the contract. The transportation costs and risks are borne by the seller until the goods are delivered. The buyer is responsible for paying any duties and taxes.

Meaning of Delivered at place dap

Delivered at Place (DAP) is an international commercial term used in shipping. It means that the seller delivers the goods to the buyer at the buyer’s specified place of destination, and the buyer is responsible for paying all transportation costs, including duties and taxes.

The DAP term is often used in conjunction with an international number, which is a unique identifier assigned to a shipment by the seller. The buyer can use this number to track the shipment’s progress and to ensure that it is delivered to the correct destination.

If the buyer does not want to be responsible for paying duties and taxes, they can choose to ship the goods on a Delivered Duty Unpaid (DDU) basis. In this case, the seller is responsible for paying all transportation costs, but the buyer is responsible for paying any duties and taxes that may be due upon arrival at the destination mentioned.

The final destination is the place where the buyer wants the seller to deliver the goods. The seller is responsible for ensuring that the goods are delivered to the final destination safely and on time.

How Does Delivered at Place DAP Work?

Under a delivered at place DAP agreement, the seller is responsible for delivering the goods to a location decided by the buyer. This location can be either the buyer’s premises, a third-party warehouse, or any other location that the buyer chooses.

The seller is responsible for all transport and delivery costs associated with moving the goods to the agreed-upon location, as well as any potential losses that may occur during transportation. The buyer is responsible for paying any import duties and taxes that may be levied on the goods once they arrive at their destination.

DAP agreements are preferably used for international shipments, as they allow the buyer to have greater control over when and where their goods are delivered. However, DAP agreements can also be used for domestic shipments of large or heavy items that cannot be delivered to the buyer’s doorstep.

International commercial terms (Incoterms) are a set of standardized terms and conditions that are used in international trade agreements. Delivered at Place is just one of many Incoterms that can be used in an agreement. Others include Delivered Duty Paid (DDP), Free on Board (FOB), and Ex Works (EXW). When choosing an Incoterm, it is important to consider the risks and responsibilities of each party involved in the shipment.

DAP Shipping Obligations

Seller’s Obligations

1. Goods along with commercial invoices and documentation

The seller is obligated to hand over the goods, commercial invoices, and all other required documentation to the carrier at the origin port.

2. Export packing and marking

The seller is responsible for ensuring that the goods are properly packed and marked for export.

3. Export licenses and customs formalities

The seller is responsible for obtaining any export licenses or permits that may be required in order to ship the goods. The seller is also responsible for completing all customs formalities associated with exporting the goods.

4. Pre-carriage and delivery

The seller is responsible for transporting the goods to the port of loading and delivering them to the carrier. The seller is also responsible for any costs associated with the pre-shipment inspection of the goods.

5. Loading charges

The seller is responsible for paying any charges associated with loading the goods onto the carrier’s vessel.

6. Main carriage

The main carriage refers to the journey of the goods from the port of loading to the port of discharge. The seller is responsible for paying all costs associated with the main carriage, including freight and insurance.

7. Delivery to the named place of destination

The seller is responsible for delivering the goods to the buyer at the agreed-upon location.

8. Proof of delivery

The seller is responsible for providing proof of delivery to the buyer, such as a bill of lading or a commercial invoice.

Buyer’s Obligations

1. Payment for goods as specified in the sales contract:

The buyer is obligated to pay for the goods as specified in the sales contract.

2. Unloading from arriving means of transportation

The buyer is responsible for unloading the goods from the carrier’s vessel and transporting them to the agreed-upon location.

3. Import formalities and duties

The buyer is responsible for paying any import duties or taxes that may be levied on the goods. The buyer is also responsible for completing all import formalities associated with importing the goods.

4. Cost of import clearance pre-shipment inspection

The buyer is responsible for paying any costs associated with import clearance and pre-shipment inspection of the goods.

5. Onward carriage and delivery to the buyer (depending on the named place)

The buyer is responsible for transporting the goods from the port of discharge to the agreed-upon location. This may include arranged carriage and delivery to the buyer’s doorstep.

Costs Involved in International Trade

1. Export License Fee

An export license is required in order to ship certain goods out of the country. The fee for an export license varies depending on the type of goods being shipped and the destination country.

2. Customs Duty

Customs duty is a tax levied on goods that are imported into a country. The amount of customs duty varies depending on the type of good being imported and the country of origin. Customer clearance must be obtained in order to import goods into a country.

3. Import VAT

Import VAT is a value-added tax levied on goods that are imported into a country. The amount of import VAT varies depending on the type of good being imported and the country of origin.

4. Freight Charges

Freight charges are the costs associated with transporting the goods from the port of loading to the port of discharge. Freight charges vary depending on the mode of transportation, the distance traveled, and the weight and volume of the goods.

5. Insurance

Insurance is required in order to ship goods by sea. The insurance fee varies depending on the value of the goods being shipped.

6. Pre-shipment Inspection Fee

A pre-shipment inspection is required in order to ship certain types of goods out of the country. The fee for a pre-shipment inspection varies depending on the type of good being shipped and the destination country.

7. Loading Charges

Loading charges are the costs associated with loading the goods onto the carrier’s vessel. Loading charges vary depending on the mode of transportation, the weight and volume of the goods, and the port of loading.

8. Unloading Charges

Unloading charges are the costs associated with unloading the goods from the carrier’s vessel. Unloading charges vary depending on the mode of transportation, the weight and volume of the goods, and the port of discharge.

9. Destination Agent Fee

A destination agent fee is charged by the agent who handles the import formalities in the country of destination. The fee for a destination agent varies depending on the country of destination and the type of good being imported.

10. Quarantine Fee

A quarantine fee is charged when goods are shipped to a country that has strict quarantine regulations. The fee for a quarantine inspection varies depending on the country of destination and the type of good being imported.

11. Storage Fee

A storage fee is charged when goods are stored at the port of discharge prior to being delivered to the buyer. The fee for storage varies depending on the length of time the goods are stored and the type of good being imported.

Advantages of Delivered at Place DAP

Some of the advantages of DAP are

1. The buyer is relieved of the burden of import formalities

The buyer does not have to obtain an import license or go through customs formalities. The buyer is also not responsible for paying import duty or VAT.

2. The buyer does not have to arrange for transport from the port of discharge to the place of delivery

The seller is responsible for arranging and paying for transport from the port of discharge to the agreed-upon place of delivery.

3. The buyer does not have to pay for storage at the port of discharge

The seller is responsible for paying storage fees if the goods are delivered to the buyer before the agreed-upon date of delivery.

4. The buyer does not have to pay for insurance

The seller is responsible for paying the insurance fee if the goods are shipped by sea. The buyer is also not responsible for paying any other fees related to shipping, such as freight charges, loading and unloading charges, etc.

5. The buyer has the option to reject the goods if they are not delivered as agreed

If the seller does not deliver the goods as agreed, the buyer has the option to reject the goods.

Cons of DAP

Some of the disadvantages of DAP are

1. The buyer may have to pay import duty and VAT if the goods are delivered after the agreed-upon date of delivery:
2. If the goods are delivered after the agreed-upon date of delivery, the buyer may have to pay import duty and VAT.
3. The buyer may have to pay storage fees if the goods are delivered before the agreed-upon date of delivery.
4. If the goods are delivered before the agreed-upon date of delivery, the buyer may have to pay storage fees.

DAP vs DDP

Buyer’s risk is much higher in Delivered at Place DAP than in Delivered Duty Paid.

In Delivered at Place DAP, the seller delivers the goods to the buyer at the buyer’s specified destination. The buyer is responsible for all transportation costs and risks associated with getting the goods to their final destination, as well as any duties and taxes that may be due.

This is in contrast to Delivered Duty Paid, where the seller is responsible for delivering the goods to the buyer’s specified destination, including all transportation costs and risks, as well as any duties and taxes that may be due.

Conclusion!

In the end, it can be said that delivered at place has its own advantages and disadvantages which should be considered before opting for this Incoterms.

Import clearance formalities and other responsibilities are assumed by the seller under Delivered at Place DAP terms. The buyer is only responsible for transportation costs from the seller’s door to the named destination mentioned in the contract

What do you think? Is delivered at the place the right Incoterms for your business? Let us know in the comments below!

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