Definition (short)
– Delivered‑at‑Place (DAP) is an Incoterm that assigns to the seller the responsibility for delivering goods to a named destination and bearing the costs and risks of transport up to that point. The buyer becomes responsible for unloading the goods and handling import clearance, including payment of duties and taxes.
Context and origin
– Incoterms are standardized trade terms published by the International Chamber of Commerce (ICC) to clarify who does and pays for what in international shipments. DAP was introduced in the 2010 edition of Incoterms (it replaced the older DDU term) and applies regardless of the mode or combination of modes of transport.
Who does what — step‑by‑step (typical flow under DAP)
1. Seller prepares goods for export: packaging, commercial invoice, and export documentation.
2. Seller obtains any required export licences or approvals.
3. Seller arranges pre‑carriage (e.g., trucking to port), loading, and the main carriage to the agreed destination.
4. Seller bears the cost and risk during transit and up to delivery at the named place; upon arrival the seller provides proof of delivery.
5. Buyer unloads the goods at the named place and completes import formalities (customs clearance).
6. Buyer pays any import duties, local taxes, and any fees associated with import clearance or unloading.
7. Payment timing: payment obligations between buyer and seller are contract‑specific, but in many contracts payment or acceptance
occurs at delivery, when the buyer inspects the goods and accepts them at the named place (subject to any contractual inspection/acceptance terms).
Practical implications (summary)
– Risk transfer: The seller bears risk of loss or damage to the goods during carriage and until the goods are made available at the agreed place of destination. The buyer assumes risk from that point onward.
– Cost allocation: The seller pays all costs to bring the goods to the named place (transport, export clearance, freight, terminal handling up to that place). The buyer pays for import clearance, import duties and taxes, unloading at the destination, and any onward transport beyond the named place unless the contract says otherwise.
– Customs and formalities: Seller handles export formalities; buyer is responsible for import formalities and charges (unless the parties agree otherwise).
– Insurance: Neither party is required by DAP to buy cargo insurance for the other. If protection against transit loss is desired, either party must arrange it by separate agreement.
Checklist — Seller (DAP)
1. Confirm the exact named place of delivery (be specific: terminal name, door, quay, or precise address).
2. Prepare commercial invoice, packing list, export licences, certificates of origin and other required export documents.
3. Arrange pre‑carriage (if any), main carriage to the agreed place, and pay those costs.
4. Obtain and retain transport documents and proof of delivery to show the goods arrived at the named place.
5. Ensure packaging is suitable for the full transit and local unloading method at the destination.
6. Decide whether to purchase cargo insurance and, if so, who is the beneficiary. Document any agreement on insurance in the contract.
7. Communicate lead times and arrival notifications so the buyer can prepare for import clearance and unloading.
Checklist — Buyer (DAP)
1. Verify the precise named place (so unloading responsibility and import point are clear).
2. Arrange for import customs clearance, licences, duties and taxes; know local documentation requirements.
3. Prepare to unload the goods at arrival and bear any unloading costs (unless contract says seller will do so).
4. Arrange onward transport from the named place if needed.
5. Coordinate timings with seller to ensure timely collection and avoid storage or demurrage charges.
6. Consider insurance for the period after risk passes (or request seller provide insurance as part of the deal).
Worked numeric example
Assumptions: seller and buyer agree DAP – “City A warehouse”.
Seller costs up to delivery:
– Production cost (goods): $1,000
– Packaging & export documentation: $50
– Pre‑carriage to port: $150
– Export clearance fees: $30
– Main carriage to City A: $600
– Terminal handling and delivery to named warehouse: $120
Seller total cost to DAP = $1,950
Seller then adds a profit margin (say 10% = $195) → seller’s DAP price quoted to buyer = $2,145.
Buyer costs on arrival at City A (examples):
– Unloading and local handling: $120
– Import duty/taxes and customs brokerage: $200
– Onward local trucking beyond the named place (if needed): $80
Buyer total arrival costs = $400.
Interpretation: The buyer pays $2,145 to the seller (or whatever payment terms are agreed) for goods delivered to City A warehouse. On delivery, the buyer will also need to pay $400 in import/unloading-related costs. The seller’s price and the buyer’s expected extra charges should be confirmed in negotiations.
Common pitfalls and how to avoid them
– Vague delivery point: Specify an exact place (address, terminal and where at the terminal) to avoid disputes about when delivery and risk transfer occur.
– Assumed unloading: Many buyers assume the seller will unload; under DAP the buyer must unload unless
unless your sales contract explicitly states otherwise. Under DAP the seller’s obligation ends when the goods are made available at the named place; unloading is the buyer’s responsibility unless the parties agree and document that the seller will perform unloading.
Other common pitfalls and how to avoid them
– Import clearance misunderstandings: The seller must not clear for import or pay duties unless expressly agreed. Make roles explicit in the contract: who files import documents, who pays duties, and who contracts customs brokers.
– Insurance expectations: The seller is not required to insure the goods in transit under DAP. If either party needs cargo insurance, specify who arranges and pays for it, what perils are covered, and the insured value.
– Incomplete delivery address: Give a full, unambiguous address (including terminal name, pier/door number, coordinates or GPS point if remote) and state whether delivery must be inside a warehouse or merely at a terminal gate.
– Documentation gaps: Specify which transport documents (bill of lading, waybill, CMR, air waybill), commercial invoice details, packing lists, and any regulatory certificates are required and when they must be provided.
– Local handling capacity: Confirm the named place can handle the vehicle type and weight you use (e.g., container chassis vs. heavy lift). If not, allocate responsibility and costs in advance.
– Timing and demurrage: Clarify free time allowances at terminals and who bears demurrage/detention charges if goods are not cleared or collected on time.
Quick checklists
For sellers (what to do before delivery)
1. Confirm the exact named place and agreed unloading responsibility in the contract.
2. Arrange carriage to that place and obtain transport documents showing delivery to the named place.
3. Ensure goods are packed and labelled for the destination and ready for unloading.
4. Provide buyer with transport documents, commercial invoice, packing list, certificates required for import.
5. Keep buyer informed of arrival time and any delays.
For buyers (what to arrange before arrival)
1. Confirm who will unload and, if you will unload, arrange labor and equipment.
2. Arrange import clearance (customs broker), pay duties and taxes, and prepare required permits.
3. Arrange onward local delivery from the named place if needed.
4. Plan for terminal free time, possible storage fees, and payment of local handling costs.
Worked numeric example
Assumptions:
– Goods value invoiced: $12,000 (seller’s price)
– Seller pays international freight to named place and export formalities: $1,000
– Buyer pays import duty/taxes: $720
– Buyer arranges unloading and local delivery beyond named place: unloading $80; local trucking $150
Calculations:
– Seller’s total cost to deliver (seller’s perspective) = goods production cost + export formalities + freight to named place. If we take only the transport/export numbers here: seller’s outlay to deliver = $1,000 (plus production cost embedded in the $12,000 invoice).
– Buyer’s arrival costs (amount due at import/unloading) = import duty/taxes + unloading + any onward trucking = $720 + $80 + $150 = $950.
Interpretation: The buyer pays the seller $12,000 for the goods delivered to the named place. On arrival, the buyer must pay another $950 to clear, unload and move the goods beyond the named place, unless the parties alter responsibilities in their contract.
Practical negotiation tips
– Put DAP into a written sales contract with explicit details: exact delivery place, who unloads, who arranges customs clearance, who insures, and allowed time windows for collection.
– If you want the seller to arrange import clearance or insurance, specify a different Incoterm (e.g., DDP — Delivered Duty Paid — for seller-paid import duties) or add a contractual clause to DAP.
– Use standard Incoterms 2020 language as a baseline and add specific local instructions to avoid ambiguity.
Summary (key points)
– Under DAP (Delivered At Place), the seller delivers when the goods are placed at the buyer’s disposal on the arriving means of transport at the named place; unloading is the buyer’s responsibility unless agreed otherwise.
– The seller bears costs and risks of carriage to the named place and export formalities; the buyer bears import formalities, duties, unloading and onward costs.
– Be explicit in contracts about place details, unloading, insurance, and documentation to avoid disputes and unexpected charges.
Educational disclaimer
This information is educational only and not personalized investment, legal, or shipping advice. Parties should consult trade lawyers, freight forwarders, or customs experts for specific transactions.
Selected references
– International Chamber of Commerce (ICC) — Incoterms rules overview: https://iccwbo.org/resources-for-business/incoterms-rules/
– UK Government — Incoterms guidance for importers and exporters: https://www.gov.uk/guidance/incoterms
– United Nations Conference on Trade and Development (UNCTAD) — Incoterms and trade facilitation: https://unctad.org/topic/trade-logistics/incoterms
– U.S. Customs and Border Protection — Importing into the United States: https://www.cbp.gov/trade/basic-import-export
– Investopedia — Delivered at Place (DAP): https://www.investopedia.com/terms/d/delivered-place-dap.asp