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The word "Delivered at Place" (DAP) is a part of the Incoterms, a set of uniform regulations that specify the duties and obligations of buyers and sellers in contracts for international trade. The International Chamber of Commerce (ICC) publishes Incoterms, which are periodically revised to account for modifications to laws and business practices. 2020 saw the release of Incoterms' most recent version.
DAP, as defined by Incoterms 2020, states that the seller delivers the products when they are put at the buyer's disposal on the arriving mode of transportation and prepared for offloading at a specified point of destination. The seller is responsible for all shipping charges, including freight, insurance, and transit formalities, as well as any hazards associated with getting the products there. The buyer is in charge of unloading the items from the transport truck and paying any import taxes or charges that may be imposed by the local government. When the merchandise is prepared for unloading at the destination, the risk is transferred from the seller to the buyer.
DAP is an encompassing phrase that can refer to any form of transportation or combination of modes, including land, air, sea, and inland waterways. When transporting goods by truck or container, for example, it is appropriate since the seller has direct access to or control over the delivery vehicle at the destination. Also, it works well in circumstances where customs clearance procedures are straightforward or predictable at the final destination, like when selling within a free trade area or a common market.
Buyers and sellers should be aware of the DAP's restrictions and difficulties, nevertheless. For example:
- DAP makes no mention of who bears responsibility for any loss or damage that occurs during unloading. If there isn't a clear understanding of who is responsible for taking this risk, it could lead to disagreements between buyers and sellers.
- The DAP does not state who is responsible for organizing or paying for any inspections or testing that may be needed to meet destination-specific legal requirements. If there isn't a clear understanding of who should take care of this duty, it could cause delays or extra expenses.
- Compared to alternative terms that transfer risk earlier in transit, including Free Carrier (FCA) or Free Accompanying Ship (FAS), DAP may expose sellers to higher risks and expenses. In some marketplaces, this may have an impact on the profitability and competitiveness of sellers.
- DAP may subject purchasers to higher import tariffs or taxes than alternative options, such as Delivered Duty Paid (DDP), that include these costs in the contract price. In some economies, this might have an impact on how consumers budget their money.
