The revised 2020 publication of incoterms includes the DAP rule, wherein the seller is responsible for unloading of goods at the nominated place. Here, his liability for the risk and cost of goods rests with him till the designated port, after which the duty shifts to the buyer.
DAP stands for ‘Delivery at Place’, and this incoterm can be used for any form of transport or even for more than one mode of transport. Under DAP terms, the seller and the buyer have to agree on the place of destination.
Likewise, the terms of unloading at the designated place should be indicated by the buyer as the cost of unloading will be borne by him, along with the importing charges and other local charges.
The incoterm DDU (Delivered Duty Unpaid) has been made inactive in incoterms 2020 -- the closest term that describes the functions of DDU incoterms under the revised guidelines is DAP.
Under DAP terms, the seller’s liability lies till the designated port, so his responsibility starts right from the place of origin, i.e., inland transport from the warehouse to the first port (exporter’s country) and then carriage proceedings & logistics from the first port to the nominated port (importer’s country).
The DAP payment terms are as follows :-
The seller pays for DAP freight as he is liable for carriage till the destination port as well as the inland transit from the warehouse to the port. This can be either road transport or rail transport, and also the shipping terms from the first port to the designated port are to be carried out by the seller.
DAP incoterms does include insurance. The seller can pay for coverage for damage to goods till the designated port, and also take marine insurance if the goods are to be moved by ocean/sea. As the risk and damage to goods stays with the seller till the goods are delivered at the designated port, he is liable for the insurance of goods under DAP.
Export customs and related duties are carried by the seller. He is answerable for all necessary documents, i.e., bill of lading, commercial invoice, insurance certificate, packing list etc. for customs proceedings. All charges for export proceedings will be borne by the seller.
The buyer has responsibility for unloading goods at the destination country’s port. Later, inland transit of goods from the designated port to his owned warehouse is also a part of his responsibility.
The DAP payment terms are as follows :-
The price for carriage is already paid by the seller so the only liability for the buyer is to take care of import customs proceedings and inland transit till his own warehouse.
The buyer has no obligation for insurance as the risk of damage to goods is the seller's responsibility till the goods arrive at his country’s port.
In DAP terms, the import customs proceedings are the responsibility of the buyer. So the evidence of documents provided by the seller are to be acknowledged by the buyer. As mentioned earlier, the unloading of goods at the destination port is the buyer’s responsibility. He will be held chargeable for all the customs formalities.
Delivery duty Unpaid (DDU) is not included in the revised 2020 publication, the closest term that describes the functions of DDU incoterms is DAP Incoterms.
Yes, DAP includes unloading of goods on the delivery destination port, and it is to be carried out by the buyer.
The seller pays for the DAP freight as he is responsible for the carriage proceeding till the importer’s country port.
DAP does include customs clearance, wherein the export customs are carried out by the seller and the import customs clearance is to be done by the buyer.
The major difference between DAP and DAT is that the unloading of goods on the dock port in DAP is settled by the buyer, and in DAT the responsibility rests with the seller.
Basic difference between the terms is the mode of transportation, where in DAP the parties have access to all modes of transport, in CIF they are restricted to water and inland transit.