DAP Meaning: Delivered at Place Explained (With Examples)

What does DAP mean in shipping?

DAP means Delivered at Place, an Incoterms® 2020 rule under which the seller delivers at the agreed destination before unloading. It can cover sea, air, road, rail or a combination of modes.

For anyone buying from China, the important distinction is between delivery and import clearance. The seller arranges transport to the named point; the buyer handles the import formalities and applicable import duties and taxes.

A DAP destination can be a terminal, warehouse or another agreed location. It does not automatically mean delivery to your premises.

DAP responsibilities: who pays and who carries risk?

This table shows the normal allocation. Risk means loss of or damage to the goods, rather than responsibility for paying a particular invoice. The buyer-failure exceptions are explained below.

Where does risk transfer, and who unloads?

Risk normally transfers when the goods reach the precise agreed destination point, remain on the arriving vehicle and are at the buyer’s disposal ready for unloading. Arrival at an earlier port does not complete delivery if the contract names an inland warehouse.

The buyer arranges unloading. If unloading charges are for the seller’s account under its carriage contract, the seller cannot recover those separately from the buyer unless otherwise agreed. That cost arrangement does not move the DAP risk-transfer point.

Buyer failures can create exceptions before delivery. Failure to fulfil the buyer’s clearance obligations makes the buyer bear resulting loss or damage. Where the buyer is entitled to choose the delivery time within an agreed period or the receiving point within the named destination, it must give sufficient notice. Failure to do so makes it bear risk from the agreed delivery date or the end of the agreed delivery period. These exceptions require the goods to be clearly identified as the contract goods.

Who handles export and import clearance?

The seller carries out and pays for applicable Chinese export clearance and clearance in transit countries other than the country of import. The buyer carries out and pays for destination-country import clearance, including applicable import duties and taxes.

A broker can perform the buyer’s clearance work. Using the seller’s forwarder does not by itself transfer the buyer’s DAP obligations to the seller.

Before dispatch, agree who will provide the declaration information, appoint the broker and respond to customs requests. Coordinate clearance with the seller’s onward transport.

When should you use DAP, DDP or DPU?

Consider DAP when you want the supplier to manage transport to an exact destination and you can handle local import clearance and unloading. Confirm that you can meet those obligations before agreeing the term.

If you want the seller to handle import clearance and applicable import taxes, compare DDP for seller-handled import clearance and taxes. If you require the seller to unload, compare DPU for seller-handled unloading. Check whether the seller can lawfully perform the intended import role before choosing DDP.

If you want to appoint and control the main carrier, explore FCA. If the seller pays freight to the agreed destination but risk transfers on delivery to the seller-contracted carrier, read CPT.

China example: delivery to an overseas warehouse

Illustrative example: a buyer outside China orders storage cabinets from a Chinese factory. The contract specifies DAP, followed by the buyer’s full warehouse address, the receiving point and Incoterms® 2020.

The factory arranges export clearance and transport to that receiving point. The buyer appoints an import broker, pays applicable import charges and prepares suitable unloading equipment.

If the cabinets suffer transit damage before DAP delivery, the seller normally bears that risk. If they are damaged during unloading after delivery, the buyer bears it. A hold caused by the buyer’s failure to clear import can engage the earlier-risk exception, provided the goods are clearly identified as the contract goods.

Before accepting the quote, ask for a breakdown of freight, import-related exclusions, unloading arrangements and any insurance purchased. Record access restrictions and delivery booking requirements.

UK worked application: customs value and import VAT

If that warehouse is in Cambridge, do not automatically use the full DAP invoice unchanged as the customs value. HMRC allows UK transport costs included in the goods price to be deducted where they can be distinguished and supporting evidence is available.

Import VAT valuation starts with customs value and adds applicable Customs Duty, levies, excise duty and other import charges, excluding the import VAT itself, plus relevant incidental expenses. These include transport and insurance to the first UK destination and expenses resulting from transport to a further UK destination known at importation. Do not add amounts already included.

These are UK valuation points, not worldwide tax rules. For another destination, confirm the treatment with its customs authority or your broker.

Check the delivery point before comparing quotes

Write the full address and precise handover point beside DAP, and identify the Incoterms® 2020 edition. Separately agree the delivery window, unloading arrangements, customs coordination and insurance.

Use the Incoterms overview and comparison chart to compare responsibilities. Keep destination and exclusions consistent when using the Incoterms price converter.