What is Delivered-at-Place (DAP)?
Delivered-at-Place (DAP) Definition
Delivered at Place or DAP is a shipping term to signify that the seller of an item is responsible for all costs and potential losses while transporting it from a port of origin to its destination and prior to unloading of the item.
Thus, the seller is responsible for costs such as:
- Transportation charges across land, air, or sea.
- Export duties
- Applicable taxes
- Worker charges to load the given item etc.
The seller is not responsible for unloading the item once it reaches the port of destination.
Instead, they simply notify the buyer that the goods have arrived at the port of destination and the risk passes on from the seller to the buyer.
Thereafter, the buyer pays for import duties and processing charges and transports the item to its final destination.
DAP is part of the incoterms list published by the International Chamber of Commerce.
These terms are used to standardize shipping and freight contracts and avoid lengthy negotiations by expressing contractual obligations in simple phrases.
Conceptually, DAP is similar to Carriage Paid To (CPT) and Delivered Duty Paid (DDP) because it assigns seller responsibility for a shipment.
However, CPT assigns cost responsibility to sellers until the item is passed onto a carrier or a person nominated by the buyer and DDP makes sellers responsible for importation costs as well.
While it aims to assign responsibilities, DAP is not always clear in dividing costs between parties.
For example, it is not clear who is responsible for charges caused due to delays in customs processing.
Different countries have different timelines and requirements to import products.
These can cause delays, leading to demurrage charges.
Exporters sometimes use other terms as substitutes to provide greater clarity in cost divisions:
- Carriage Paid To (CPT) assigns cost responsibility to sellers until the item is passed onto a carrier or a person nominated by the buyer.
- Delivered Duty Paid (DDP) makes sellers responsible for importation costs in addition to transportation charges.