DAP

What it means

DAP, Delivered at Place, is the Incoterms rule under which the seller delivers goods to the agreed place at the buyer's end and bears the risk until they arrive. Goods are delivered when they are on the arriving vehicle, ready for unloading at the destination.

The seller pays for transport to the destination and handles export formalities. The buyer pays for unloading, import customs clearance, duty and import taxes. DAP sits between FCA, where risk passes on handover to the carrier, and DDP, where the seller also pays import charges.

The rule can be used for any mode of transport, including multimodal. In intra-EU trade, where there are no customs formalities, DAP is popular because the seller arranges transport all the way to the customer and the buyer need not find a carrier.

How it works in practice

The place of delivery must be named precisely, not just the city. Stating DAP with the buyer's warehouse and full address avoids disputes over who pays for transhipment or vehicle waiting time. In road transport the goods travel with a CMR consignment note.

For imports from outside the EU, DAP means the buyer handles customs clearance and import VAT. If the buyer cannot arrange this in time, the goods sit at the border or in a warehouse and storage charges arise, which the buyer bears under DAP.

For VAT on supplies to another member state, it matters who arranged the transport. Under DAP the seller does, so it has better access to the proof of transport it needs to apply the exemption for intra-EU supplies of goods.

What to watch out for

Incoterms cover costs and risk, not transfer of ownership or payment terms. These must be agreed separately in the sales contract, and a seller wanting security of payment can add retention of title or require payment in advance.

Transport insurance is not compulsory under DAP, but since the seller bears the risk until destination, insuring the goods is in its interest. The buyer should inspect the shipment on receipt and note any damage on the CMR, otherwise a later claim is difficult.