DAP Incoterm: Delivered at Place, Cost and Risk

DAP stands for Delivered at Place, an Incoterms rule used in contracts for the sale of goods. The seller arranges and pays for carriage to the named place of destination written into the contract, and carries the risk of that carriage. The buyer unloads the goods and handles import clearance, duties and import taxes.

Risk passes at a precise moment. It passes when the seller places the goods at the buyer's disposal on the arriving means of transport, ready for unloading, at the agreed point at the named place of destination. Not when the vehicle crosses a border, and not when the last pallet is on the ground.

What the seller owes under DAP

The seller contracts the carriage and pays for it all the way to the named place, and keeps the risk of loss or damage up to the delivery moment described above. Where export formalities apply, the seller clears the goods for export and carries the cost and risk of that step.

Packaging follows a conditional rule, not a blanket one. The seller packages the goods at its own cost, unless it is usual for that particular trade to transport the type of goods sold unpackaged. Bulk cargo, some steel, timber and vehicles move unpackaged as a matter of trade practice, and in those cases no packaging duty falls on the seller.

The seller also marks the packaging as the contract and the trade require, and provides the documents the buyer needs in order to take delivery of the goods.

Why the named place decides the argument

A DAP term is only as useful as the place named next to it. DAP plus a city name leaves the exact point open, and the seller may then pick it. Naming the street address, the terminal and the gate removes any later argument about where delivery happened and who pays for the last stretch.

Because risk runs to that point, everything before it sits with the seller: a breakdown, a reroute, a delay on the road, damage in transit. Everything from that point sits with the buyer, including taking the goods off the vehicle.

What the buyer takes on

The buyer unloads the goods from the arriving means of transport. If the site has no dock, no forklift and no crane suited to that kind of load, that is the buyer's problem to solve, which is why the unloading point is worth checking before the vehicle is dispatched rather than after it arrives.

The buyer also clears the goods for import, pays the duties and any import taxes, obtains an import licence where one is required, and carries the cost of anything that happens after delivery.

DAP compared with DDP, DDU and DPU

Under DDP (Delivered Duty Paid) the seller goes further: it clears the goods for import and pays the duties and import taxes as well. That is the heaviest obligation in the set, and DAP deliberately stops short of it.

DDU (Delivered Duty Unpaid) is the obsolete predecessor with the same split of responsibilities. A contract written today should use DAP instead of DDU, because DDU is no longer part of the current rules.

Under DAT, later renamed DPU (Delivered at Place Unloaded), the seller unloads the goods. That single difference is usually what decides between the two terms: under DAP the goods arrive ready for unloading and the buyer takes them off.

DAP on a transport order

For the haulier, DAP normally means the seller or its freight forwarder is the customer. That party books the truck, gives the instructions and pays the freight. The consignee receives the goods but is not usually the party to invoice.

Two things regularly cost money on a DAP run. The first is waiting at destination while the receiver organises unloading, since DAP puts unloading on the buyer as between seller and buyer, and whether your driver touches the load is settled by the transport contract, not by the Incoterm. The second is customs: the goods are not cleared for import by the seller, so a vehicle can stand while the buyer's broker works.

Copy the named place into the transport order exactly as the sales contract words it, with the gate or dock reference, the opening times and the name of the person who signs for the goods. An Incoterm on a purchase order and an address on a delivery note that quietly disagree is how a delivered leg turns into a dispute.