What does DAP stand for?
What is Delivered At Place?
Delivered At Place (DAP) refers to a specific place of delivery in international trade where responsibility for the goods passes from the seller to the buyer. Under DAP terms, the seller covers all costs and risks associated with transporting goods to the specified destination. For successful international shipping, it’s crucial to precisely define the destination in the contract to avoid legal issues and ensure smooth logistics operations.
DAP within the Incoterms framework
Delivered at Place is part of the Incoterms (International Commercial Terms), established by the International Chamber of Commerce (ICC). These standardized trade terms (also included in the current version of Incoterms 2020, which has been in force since 1 January 2020) facilitate international commerce. They provide universally understood rules for cost allocation and risk transfer. Updates ensure the Incoterms remain relevant in modern global trade practices by reflecting reflecting current trends in logistics and commerce.
Key aspects in international shipping
Under DAP terms, the unloading process and its costs typically fall under the buyer’s responsibility. Unlike DDP (Delivered Duty Paid), where the seller handles customs clearance and duties, DAP requires the buyer to manage these aspects. In some delivery contracts, transportation concludes after unloading, particularly in airfreight, where it may be difficult or impossible for the buyer to unload the freight themselves.
Seller’s and buyer’s responsibilities
Operating under Delivered-At-Place terms means sellers are responsible until the shipment reaches the designated destination. Their obligations include:
- Professional packaging suitable for the transport method
- Complete documentation preparation
- Valid export licenses procurement
- Payment of loading charges at origin
- End-to-end transportation management
- Maintaining cargo insurance throughout transit
- Delivery to the specified destination
The transfer of responsibility occurs when the goods arrive at the agreed location, ready for unloading. At this point, the buyer assumes responsibility for:
- Unloading operations
- Import customs clearance
- Payment of import duties and taxes
- Final delivery to their facility
Delivered At Place in time-critical logistics
In time-sensitive scenarios, DAP terms are crucial for clear responsibility allocation. Common applications include:
- Emergency spare parts delivery: When manufacturing facilities face critical equipment breakdowns, DAP terms help streamline the delivery process by clearly defining handling responsibilities up to the final destination, minimizing potential delays in the supply chain.
- Urgent life science logistics: For urgent medical supplies or equipment, DAP provides a clear framework for handling temperature-sensitive or time-critical medical cargo, ensuring proper responsibility assignment throughout the entire journey.
- High-tech component transportation: In the technology sector, where intricate processes and time-sensitive operations are the norms, DAP terms help manage the complex logistics of sensitive electronic components while maintaining clear liability boundaries.
Delivery timing impact of DAP
Choosing Delivered-At-Place terms significantly influences delivery timelines in several ways:
- Customs clearance responsibility allocation affects overall transit time
- Single-party control until destination often enables better shipment tracking
- Clear handover points help prevent delays in multi-modal transport
- Pre-defined delivery location enables better resource planning