What does DAP (Delivered at Place) mean, how does it work and what are the obligations?

DAP, or “Delivered at Place,” is a commercial term under Incoterms®, a set of internationally recognized rules for interpreting the most commonly used terms in international trade. DAP refers to an agreement to deliver at a named place, where the seller bears all costs and risks associated with bringing the goods to the agreed location. This means that the seller is responsible for transporting the goods, the necessary documentation, packaging, export and loading fees. The seller also bears the risk of any loss or damage that may occur during the carriage of the goods to the named location.

Here are the most important rules that apply to any type of transport - road, air, sea, naval: - EXW (Ex Works) refers to the situation in which the seller fulfills his delivery obligation when he places the goods at the disposal of the buyer at his place of business or another agreed place; - FCA (Free Carrier) means that the seller delivers the goods to the carrier indicated by the buyer; - CPT (Carriage Paid To) and CIP (Carriage and Insurance Paid To) imply that the seller pays the transportation for the delivery of the goods to the destination; - the terms DPU and DDP are related to the responsibilities of the seller and the buyer regarding the delivery, unloading and customs clearance of the goods.

Here is a concrete example to better understand how DAP works: Let's say you are a seller in Bucharest and the buyer is in London. After you have completed the transaction, you are responsible for shipping the goods to London, to the location specified by the buyer.

In a DAP contract, roles and responsibilities are clearly defined to avoid any confusion.

As the seller, in a DAP (Delivered at Place) contract, you are responsible for ensuring that the goods arrive at the place agreed upon in the contract. You are also required to provide the buyer with the necessary documents to take delivery of the goods. This includes the invoice (in physical or electronic format) and any other documents specified in the contract. When it comes to payment, the responsibility lies with the buyer. He must pay the seller the value of the goods, according to the amount stated in the contract. When should this payment be made? Well, the time of payment should be clearly specified in the contract. This can be before shipment, upon unloading, or at a set time, such as 30 days after delivery.

Under DAP, delivery is the point in time and place where the seller fulfills his primary responsibility to place the goods at the disposal of the buyer. In this scenario, the seller is responsible for arranging the transport, paying all associated costs and bearing the risk of loss or damage to the goods until delivery. The seller is not responsible for unloading the goods. Under a DAP agreement, the buyer is obliged to take delivery of the goods once they have been delivered in accordance with the contractual specifications. DAP and the CMR document work together to facilitate the safe, efficient and Incoterms-compliant international carriage of goods by road. Details from the CMR, such as the description of the goods, their quantity and value, can be easily integrated into the DAP contract.

In the context of a DAP (Delivered at Place) contract, the “transfer of risk” is the moment when responsibility for the goods traded moves from the seller to the buyer. The seller bears all risks of loss or damage to the goods until delivery at the agreed place. After this point, the buyer becomes responsible for any possible damage or loss of the goods. If the buyer does not accurately inform the seller about the place of delivery, he may end up bearing the costs in case of loss or damage to the goods. Another important responsibility of the buyer is to clear the goods upon import. If the buyer fails to fulfill this obligation, he assumes the risks and losses related to the retention of the goods for a certain period by the authorities.

The seller assumes the responsibility to organize or negotiate a contract of carriage with a carrier to the place of destination specified in the commercial contract. Therefore, all costs associated with the transport of the goods are borne by the seller. If there is a specific point at the place of delivery where the goods must be transported, the buyer must communicate this to the seller. In the absence of these details, the seller is free to decide the place of delivery of the goods, depending on convenience or other logistical considerations. The buyer has no obligation to the seller to conclude a contract of carriage. His obligations are limited to receiving the goods at the agreed place and handling any necessary formalities after arrival. Useful information! Transport Exchange provides shippers with an online platform where they can publish the details of their transport (type of cargo, route, delivery time) and receive offers from numerous carriers. This allows shippers to compare prices and choose the most convenient offer that fits the DAP terms.

Even though the seller bears the risk of loss or damage to the goods up to the point of delivery, he is not obliged to insure the goods. Thus, if the transport encounters problems and is not insured, the seller assumes the risks and costs. The buyer, although not obliged to insure under DAP, may consider taking out insurance to protect himself against possible damage or loss of the goods after delivery.

The seller is responsible for ensuring that all necessary shipping documents are made available to the buyer in a timely manner and at the right place. This can involve a number of tasks, from preparing the documents to coordinating with shipping agents to ensure that the documents reach the buyer. These documents can be in physical or electronic format, depending on what has been agreed upon in the contract. On the other hand, the buyer has the role of accepting and retaining the shipping documents provided by the seller. Although the buyer is not directly involved in the shipping process, he still has an important role in ensuring that all shipping documents are in order. It is his duty to check the documents and report any problems or discrepancies.

The seller assumes responsibility for all export formalities required by the country of origin of the goods, from obtaining permits to licenses and authorizations. In addition, he must not neglect the obligations relating to transit countries: these must be fulfilled and paid for before the actual delivery of the goods. If applicable, he has the duty to assist the buyer in obtaining the necessary documents for import. This is done, however, at the buyer's risk and expense. In turn, the buyer must be active in this process. He has the responsibility to assist the seller in obtaining the documents and information necessary for export formalities. And, if necessary, he must take care of all import formalities required by your country of residence. Another component of this process is the management of storage costs. If the goods have to be stored during the customs clearance process due to the buyer's failure to fulfill his obligations, he will bear the storage costs. In the event that storage costs arise due to failure to comply with the agreed delivery period by the seller, the seller will bear the costs. CLS, through its partners, provides integrated storage and handling solutions!

The seller is responsible for checking the quality, measuring, packaging and weighing the goods. He is the one who ensures that the goods are properly prepared for transport, meeting all the necessary standards (at his own expense). At this stage, the buyer has no obligations.

The seller must bear all costs up to the delivery of the goods: transport costs, loading of the goods and any additional insurance. In some cases, if the contract so specifies, the seller may also be responsible for the costs of unloading the goods at destination. If the buyer asks the seller to help him obtain information or documents necessary for various formalities, he will cover these costs. He must also pay the unloading fees, unless they have been paid by the seller.

Advices are documents that certify that the goods have been delivered to the agreed place and are ready for collection. They are, in fact, proof that the seller has fulfilled his obligations and that the goods are now the responsibility of the buyer. The seller must prepare and provide all necessary advices before the goods are delivered. These may include, but are not limited to, commercial invoices, shipping documents and certificates of origin. If the seller does not provide the necessary advices, he may be held responsible for any delay or problem that may arise in the delivery process. It is the buyer's responsibility to receive and retain all advices provided by the seller. Therefore, it is important to understand and use Incoterms® terms, especially DAP, correctly to avoid confusion and conflicts that may arise in commercial transactions. By understanding these terms, you can ensure efficient and profitable collaboration with your trading partners.