What does DAP mean? Get clear on Delivered at Place, who pays customs, when the risk transfers, and the difference between DAP and DDP.
DAP stands for Delivered at Place and is one of the delivery rules in Incoterms 2020. Under DAP, the buyer is responsible for customs clearance and other import formalities, as well as the associated customs and import costs.
What does DAP mean?
DAP is short for Delivered at Place and is an Incoterm.
Under DAP, the seller is responsible for getting the goods transported to the agreed place in the destination country. The risk transfers to the buyer when the goods have been placed at the buyer’s disposal on the selected means of transport, ready for unloading at the agreed place.
The buyer handles the unloading itself, as well as customs clearance and other import formalities.
Who pays customs duties under DAP?
Under DAP, the buyer is responsible for import customs clearance. This means that, as a rule, the receiver pays the customs and import costs that arise when the goods are imported into the destination country.
For businesses shipping goods to customers abroad, it is therefore important to be clear about the delivery terms. DAP can mean that the customer faces import-related costs that are not part of the price the seller charged for the goods and the transport.
How does DAP work in practice?
In a sale on DAP terms, the buyer and seller agree on a specific place of delivery. This could be, for example, the buyer’s address or another agreed destination.
The seller arranges transport to this place and bears the risk during transport until delivery. Once the goods have arrived and been placed at the buyer’s disposal, ready for unloading, the risk transfers to the buyer.
DAP should therefore be stated together with the agreed place of delivery and the version of Incoterms used, for example DAP [named place], Incoterms 2020.
What is the difference between DAP and DDP?
DAP and DDP (Delivered Duty Paid) are similar, because in both cases the seller is responsible for getting the goods transported to the agreed destination. The key difference lies in how the import is handled.
Under DAP, the buyer is responsible for customs clearance and other import formalities, as well as the associated customs and import costs. Under DDP, these obligations lie with the seller.
The difference is especially relevant for shipments that cross a customs border, because the choice between DAP and DDP determines who is responsible for customs clearance and the associated import costs.
DAP and Shipmondo
When you book international shipments through Shipmondo, DAP can be selected as the Incoterm for carriers and shipping products that support it.
When customs documents are filled in automatically, you can specify DAP under Incoterms. This indicates that the customs costs on import into the destination country are to be borne by the receiver.
The options depend on the selected carrier and the specific shipping product. For example, PostNord supports DAP for a number of export products in Shipmondo. DAP can also be selected for relevant DSV XPress shipments to countries outside the EU, among others. But Shipmondo supports Incoterms and DAP for even more carriers.
If you use Shipmondo’s API to book freight, Incoterms can also be specified as part of the shipment data for supported carriers.