DAP Shipping Terms

DAP Shipping Terms: The Definitive FAQ Guide

DAP Shipping Terms

The parties in international trade can be guided by the rules of Incoterms 2010.

This edition contains 11 sets of international commercial terms for the delivery of goods.

DAP is a new concept introduced in Incoterms 2010.

Let’s find out what the DAP Incoterms are and how they differ from other sets of rules.

What are the DAP shipping terms?

The term DAP is an abbreviation for Delivered at Place.

It literally means the delivery of goods to some place, previously agreed between the buyer and seller.

The only thing important here is that such a place has to be situated outside the supplier’s country.

Who pays for DAP shipping?

Shipping under the DAP Incoterms is an obligation of the seller (consignor).

What are the buyers’ responsibilities in DAP shipping terms?

For the buyer, sending the necessary documents on time is very important.

If you have unforeseen difficulties in obtaining licenses for the import of goods, then all expenses for untimely unloading would fall on you.

Under the DAP delivery, the basic requirements for a buyer are the next:

  • pay for customs procedures regarding the import of the product;
  • notify the seller about the time of the alleged acceptance of the goods;
  • unload the goods on a specific date.

The latter obligation is important to keep in mind.

The supplier is only responsible for the transportation of goods to a certain location, not for unloading.

You, as a buyer, have to unload the products from some kind of transport yourself or with the means of third parties.

Chinese factories

What are the seller’s responsibilities in DAP shipping terms?

The seller must transfer to the buyer all accompanying documents for the goods.

These include invoices, and quality certificates, certificates of conformity and other documentation that is indicated in the agreement.

  1. Choose a carrier that will deliver the goods and conclude the shipping deal.
  2. Pay all customs costs for export.
  3. Notify the buyer of the location of the goods at the delivery point.
  4. The seller receives export licenses and certificates himself, at his own expense.

Upon the arrival of the goods at the destination, the seller notifies the buyer about this and provides him with the next transport documents:

  • bill of lading;
  • sea waybill;
  • air waybill;
  • waybill confirming transportation by car or by rail, etc.

What are the Bansar advantages based on the DAP Incoterms?

A lot of Chinese manufacturers trust the delivery process to Bansar.

As a reliable freight forwarding company, Bansar has clear advantages against competitors:

  • High efficiency. We always try to choose the fastest routes to fulfill your order in the shortest time;
  • 7/24 online support. You don’t have to worry about the time zones and delays connected with them;
  • Better freight rates. Bansar has private contracts with various carriers which give us the best prices for their services;
  • Professional brokerage services. Completing Chinese customs might be a tricky process without the help of experienced Bansar brokers.

Please, leave us a quote if you want to require more information about Bansar services.

Customs clearance

What are the top things to take care of for the buyer and seller?

If you want the process of delivery to go smoothly, please keep in mind the next simple tips:

  1. Accurate paperwork only, from both parties. If your documents will have some flaws, the whole process might be postponed and additional charges might appear.
  2. Choosing the right HS code for your products. The HS code is used mainly to decide which tariffs to imply for one or another product. If you pick the wrong code, it might affect the customs clearance procedure.
  3. Pay attention to extra import duty, such as anti-dumping duty and other special trade duties (please read the linked guide if you want to learn more about these charges).
  4. Take care of the delivery time. Buyer and seller have to choose the fittable shipping schedule based on the delivery time.
  5. The consignee’s broker must finish the customs clearance in time. If there will be some delays, the additional charges will arise as well.

Choosing Bansar as your partner you can be sure that there will be no issues with the delivery process.

What is the difference between the DAP and FOB Incoterms?

FOB (Free on board) terms state that the seller has to deliver goods through the ship’s rail at the port of shipment.

This means that from now on, the buyer must bear all arising costs and risks.

The DAP Incoterms, on the other hand, suggest more responsibilities for the seller, such as export duties, delivery costs, etc.

What is the difference between DAP and DDP in Incoterms for shipping?

DDP (Delivered, Duty Paid) is one of the closest terms to DAP.

The main difference is that under the DDP Incoterms, the seller is additionally obliged to perform customs procedures in the country where the goods are imported.

This means that the buyer is placed in an even more advantageous position.

What’s the difference between CPT and DAP terms?

CPT (Carriage Paid To) and DAP terms are practically the same.

CPT means that the seller pays the freight for transporting the goods to the specified destination.

In practice, such a specified destination is similar to the place, mentioned in DAP Incoterms.

So what is the difference, you may ask?

First of all, it is about the transfer of risks: under CPT, they are transferred when the supplier passes goods to the first carrier, while under DAP, the seller bears with all risks until the delivery of the products to a certain place.

Another difference is connected with unloading: CPT gives this responsibility to the seller, while the DAP – to the buyer.

Incoterms 2010 comparison chart

How to differ DAP and CIP terms?

Firstly, the difference lies in liability for the risk of loss of cargo.

Under DAP Incoterms, if the carrier loses cargo on the way to your country, this will be the sender’s problem.

Under CIP (Carriage and Insurance Paid to) conditions, this will be your (buyer’s) problem.

Another difference lies in the insurance responsibilities.

The DAP Incoterms do not have any clauses about insurance, while the CIP rules oblige the seller to pay for insurance.

What is the difference between DAP and EXW Incoterms?

EXW (Ex Works) provides for the seller’s minimum responsibilities: simply placing the goods at the disposal of the buyer at the seller’s premises.

Ex Works is often the cheapest and the most hassle type of Incoterms for you.

What’s the difference between DAP and DDU shipping terms?

DDU is short for Delivered Duty Unpaid.

It is an old term which is practically the same as DAP.

Just like the DAP, the DDP oblige the seller to deliver some kind of products at the named place in the country of importation.

As we’ve already mentioned, DAP rules were introduced in Incoterms 2010.

Basically, it is a general provision which has replaced three terms: DAF, DES, and DDU.

The vast majority of trade partners, who have used DDU rules before the Incoterms 2010, have switched to DAP eventually.

However, it is not restricted to use old Incoterms, so the DDU rules are also quite popular.

What is the difference between DAP and CIF shipping terms?

CIF is an abbreviation for Cost, Insurance and Freight.

The first difference between DAP and CIF Incoterms is insurance responsibility.

DAP has no insurance obligations for parties at all, and CIF makes the seller responsible to pay for minimum insurance coverage.

Secondly, the CIF terms can be used only for the maritime and inland transport, while the DAP Incoterms fit for any kind of transport.

Finally, the difference lies in the carriage obligations of the supplier: CIF terms state that he has to deliver goods to the port of destination, while the DAP rules speak of the delivery to some certain location.

How to differ DAP and DAT shipping terms?

DAP and DAT are the new set of rules introduced in Incoterms 2010.

These terms are included in group D, which means that the transfer of the obligations is carried out at the buyer’s location.

The DAP means the delivery of cargo to a specific point.

This condition is general in the transaction, so it is important to determine the destination in the most detail when making delivery.

The DAT rules, on the other hand, implies delivery to the terminal.

In addition to the final delivery point, the difference lies in the unloading responsibilities.

Under the DAT terms, the goods have to be unloaded by the seller at the terminal, while the DAP rules give this responsibility to the buyer.

Where is the named place for handling goods and responsibilities to the buyer?

It still might be quite confusing for some of you to understand, what is the named place in the DAP terms.

The only thing that Incoterms 2010 state about it is that it has to be situated outside the supplier’s country.

Logically, you would rather choose some certain place inside your home country, but there are still some nuances.

The seller is responsible for the security of goods until they arrive at your place, as well as for their transportation inside your country.

If the supplier doesn’t have the means to do that, then he may insist on the usage of the DAT set of rules.

Does DAP Incoterms include unloading services?

No, as it was already mentioned, unloading is a 100% obligation of the buyer under the DAP Incoterms.

Who will pay the freight charge, local destination, and destination charge if the Incoterms is DAP?

Under the DAP Incoterms, all the above-mentioned charges have to be paid by the supplier.

Can I have a container of goods shipped from China directly to my property?

Yes, this is exactly why the DAP Incoterms were created for.

Under such rules, the supplier is obliged to deliver goods to your property or another needed place.

The only thing you left to bother as a buyer is an import customs clearance and in-time unloading of arrived goods.

Do DAP Incoterms include insurance?

Neither party should insure the goods under the DAP Incoterms.

Nevertheless, both the buyer and the seller should be interested in receiving compensation in the case of loss or damage to the goods.

Therefore, it is recommended to add an insurance company option to your contract formula.

Cargo ship

What are the main issues of using DAP Incoterms for the buyer?

If you want to buy something and choose the delivery under the DAP Incoterms, please be aware of two main things:

  1. You have to be able to perform import customs clearance (if you can’t do it, you can always rely on customs brokers).
  2. You have to be able to unload goods at a certain time, discusses with the seller previously.

If for some reason you won’t be able to fulfill such requirements in time, all additional charges for the delay would be on your part.

Do DAP terms include customs clearance?

Yes, like any other type of Incoterms, DAP rules have clear instructions for the customs clearance process.

The seller has to pay all customs costs for export, while the buyer is obliged to pay for import customs clearance.

What shipping method can be used in the case of DAP Incoterms?

According to DAP conditions, any type of transport can be used: air, sea, rail, road, or a combination of various modes of transport.

Truck in warehouse - Cargo Transport

What are the main steps in the delivery process under the DAP Incoterms?

The whole process of the delivery under DAP rules can be divided into the 6 key steps.

Step 1. The seller picks up goods and delivers them to the shipping company he chose before. He pays for this initial delivery, and future freight services.

Step 2. The export customs clearance is needed to be done, with the help of customs brokers or employing the supplier’s means.

Step 3. After the goods are stowed on the ship, aircraft or some other mode of transport, the transit process begins. The seller and carrier are both responsible for the goods during their international transfer.

Step 4. When the products arrive in your country, this is the moment you start acting. Remember, that under the DAP terms, the buyer has to provide the import customs clearance.

Step 5. After the customs clearance procedure is successfully done, the seller loads the goods to some kind of transport and drives them to your location. 

Step 6. At the final step, you have to unload the products from the buyer’s vehicle at a certain time. The seller passes the responsibility for goods to you, as well as all accompanying documents.

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