What is Delivered At Place (DAP)
Delivered at place (DAP) is an international trade term used to describe a deal in which a seller agrees to pay all costs and suffer any potential losses of moving goods sold to a specific location. A delivered at place agreement is applicable for any form, or combination of forms, of transportation and usually lists the point at which the buyer takes on financial responsibilities, for example, “Delivered at place, port of Oakland.” In delivered at place agreements, the buyer is responsible for paying import duties and any applicable taxes, including clearance and local taxes, once the shipment has arrived at the specified destination.
BREAKING DOWN Delivered At Place (DAP)
Delivered at place simply means that the seller takes on all the risks and costs of delivering goods to an agreed-upon location. This means the seller is responsible for everything, including packaging, documentation, export approval, loading charges and ultimate delivery. The buyer, in turn, takes over risk and responsibility as of the unloading of the goods and clearing them for import.
Delivered at Place Disputes
Even with the clear guidelines for DAP arrangements, there are still situations that result in disputes, such as when the carrier of the goods incurs demurrage — a charge for failing to unload in time — as a result of not receiving the proper clearance from one of the parties. In these cases, fault usually lies with whichever party was amiss in providing timely documentation, but determining that can be difficult, as documentation requirements are defined by the national and local authorities controlling ports and vary from country to country. Long story short, international trade law can be complex even with the benefit of defined contract terms.
DAP and Other Incoterms
Delivered at place is an international trade term that was introduced in the International Chamber of Commerce's (ICC) 8th publication of it's Incoterms — international commercial terms — in 2010. DAP replaced the term Delivery Duty Unpaid (DDU) and, while DDU may still be used colloquially, DAP is now the official term used in international trade.
The ICC itself has been around since 1919 and has released eight updates of its international commercial terms since 1936. The main driver behind the ICC and the Incoterms is the need for a clear understanding of counterparty responsibilities in international contracts, particularly when it comes to who ships what to where. With the ICC issuing concrete definitions, contracts can refer to the Incoterms, and the signing parties have a shared understanding of responsibilities. The Incoterms are updated in order to simplify usages and remove obsolete terms. Delivered at place was one of those simplifications, as the definition applies regardless of the method of transport.