NotificationImgTo buy marine open policy

DAP (Delivered at Place) Arrival Point

  • Author :
  • TATA AIG Team
  • Last Updated On :
  • 03/12/2024
  • 2 min read

DAP (Delivered at Place) is a vital incoterm introduced in 2000 to replace a few existing terms. Understanding DAP is crucial for anyone involved in international shipping and trade. Knowing the specific obligations of each party involved in a trade helps avoid misunderstandings, disputes and financial losses.

This blog will delve into the intricacies of DAP (Delivered at Place) Arrival Point. We will explore the DAP meaning in shipping, key responsibilities and the specific point of delivery under this Incoterm.

DAP Meaning in Shipping

Delivered at Place (DAP full form) is an international commercial term used in international trade to clarify the point where the seller’s responsibility ends and the buyer’s begins.

Under the DAP delivery terms, the seller is responsible for ensuring that the goods reach a designated location and are ready for unloading. Here is where the buyer takes over. The buyer must then cover any costs related to import duties, clearance and local taxes.

One of the key aspects of DAP is defining the arrival point, which must be clearly stated in the contract. This can be a port, airport, warehouse or any other agreed-upon location. DAP was introduced in 2000 to replace older incoterms like DAF, DES, DEQ and DDU, simplifying international trade.

Seller’s Obligations Under the Delivered at Place Incoterms

Rule Title Description
A1 Goods and Documentation Rules The seller is responsible for supplying the agreed goods along with a commercial invoice and any additional documentation required, such as certificates or regulatory paperwork. 
A2 Delivery Guidelines The seller must ensure that the goods are delivered to the specified destination as per the agreed terms. However, their obligation ends at delivery and they are not responsible for unloading the goods from the transport vehicle. 
A3 Risk Transfer Guidelines The risk of damage or loss remains with the seller until the goods reach the agreed destination. 
A4 Transportation Arrangements It is the seller’s duty to organise and cover the cost of transporting the goods to the named location. 
A5 Insurance Requirements The seller is not obligated to provide insurance coverage for the goods during transportation, even though the risk remains with them until delivery. If insurance is needed, it typically falls on the buyer to arrange this. 
A6 Documentation for Goods Transfer  The seller must provide all relevant documentation that enables the buyer to claim and take control of the delivered goods without any unnecessary delays or complications. 
A7 Export and Import Regulations  The seller is responsible for ensuring that the goods are cleared for export from the country of origin and for arranging any transit clearances if the goods pass through other countries on their way to the destination. 
A8 Packaging and Marking Standards The seller must properly package, label and check the goods to ensure they are suitable for transportation, following industry standards or any specific requirements laid out in the contract. 
A9 Cost Allocation All expenses related to transport, export duties and other logistical fees are the responsibility of the seller up until the goods are delivered to the buyer’s location.
A10 Notification The seller is required to inform the buyer once the goods are delivered and provide any necessary information that will help the buyer receive and manage the goods upon arrival. 

Risk Transfer at the Arrival Point in DAP

In a Delivered-at-place (DAP) agreement, the seller is responsible for the risk of damage or loss of goods until they arrive at the agreed destination. The risk transfers to the buyer once the goods are delivered to the specified location.

This means that any loss or damage occurring after delivery is the buyers' responsibility. The seller must ensure safe transportation and take necessary precautions until the arrival point is reached. After delivery, the buyer issues all risks related to the goods, marking the official transfer of liability from the seller to the buyer.

Advantage of DAP for Sellers

-Control Over Transport: Under DAP, the seller is responsible for organising and paying for transportation until the goods reach the agreed destination. This gives the seller control over the shipment and minimises the uncertainties related to transportation delays or mishandling.

-Improved Customer Service: DAP allows sellers to offer a more convenient shipping option for buyers since the seller manages the logistics up to the delivery point. This can help build strong relationships and trust with customers by simplifying the buyer’s responsibility.

-Flexibility in Delivery Location: The DAP Incoterms 2020 rule does not specify that the delivery must occur at the buyer's premises. This means sellers can arrange delivery to more flexible points, such as a terminal or customs warehouse, as long as both parties agree upon the delivery location.

-Seller’s Risk Minimisation: Under DAP, the risk for the seller ends when the goods reach the agreed delivery point. This helps the seller clearly define their responsibility and avoid further risk related to unloading or final transit within the buyer's country.

Disadvantage of DAP for Sellers

-Complexity of Customs Clearance: In cross-ocean transactions, the goods may need to be held in a customs-bonded warehouse or terminal until the buyer completes import clearance.

**-The seller remains responsible for the goods while they are en route or awaiting customs clearance. This can be challenging if the buyer encounters problems with import permits or customs delays, potentially preventing the seller from finalising delivery.

-Extended Responsibility: The seller must manage the risk of loss or damage until the goods reach the buyer’s designated location. This can lead to additional logistics and transportation costs, especially in long-distance or cross-border shipping.

-Uncertainty Due to Byter’s Delys: If the buyer faces issues or delays in customs clearance, the goods could remain stuck at this stage. The seller may face delays in completing the transaction, which can disrupt their operations and cause additional storage or administrative costs.

Difference Between DAP and DAT

DAP (Delivered at Place) and DAT (Delivered at Terminal) are both incoterms that were introduced in place of older trade terms in 2000. These are used in international trade and differ mainly in the point where the responsibility of goods transfers from the seller to the buyer.

In a DAT (Delivered at Terminal) transaction, the seller is responsible for arranging the transportation of goods and bears all the costs and risks until the goods are delivered and unloaded at a specific terminal, such as a port or warehouse. Once the goods are unloaded at this terminal, the buyer takes over, covering the costs of import duties, taxes and any further transportation.

On the other hand, under DAP, the seller’s responsibility extends to delivering the goods to a specific location agreed upon by both parties, which could be a terminal or any other designated place. However, the seller is not responsible for unloading goods. The buyer assumes responsibility for customs clearance, import duties and unloading goods at the destination.

Conclusion

DAP (Delivered at Place) offers a structured approach to international trade, balancing responsibilities between buyers and sellers. It provides buyers with the security of knowing that the seller will deliver the goods to their specified premises, reducing transportation risks and simplifying logistics.

Sellers benefit from a clear delineation of responsibilities, allowing for efficient planning and cost management. DAP offers flexibility and streamlined operation, especially for inexperienced importers or direct shipments. Overall, DAP is a valuable term that promotes clarity, efficiency and risk management in global trade.

Importance of Marine Insurance in International Shipping

Marine insurance is vital in international shipping as it provides financial protection against unforeseen risks during the transit of goods. It safeguards businesses from significant financial losses due to accidents, natural disasters, theft or delays.

A robust cargo insurance policy ensures that the goods are protected across various transportation modes, be it the ocean, air or land. Without the protection of marine insurance, companies involved in global trade face heightened risks, making it an essential part of international commerce.

TATA AIG stands out as a reliable provider of marine insurance in India. Our policies ensure comprehensive coverage, quick claims settlements and compliance with regulations. They also minimise financial disruptions and offer peace of mind.

TATA AIG’s marine insurance policy is designed to cover various risks, such as cargo loss or damage, theft, piracy and even natural disasters. Our policies are highly flexible, allowing businesses to customise coverage to meet their specific shipping needs.

Whether it is high-value cargo, hazardous materials or perishable items, TATA AG’s coverage ensures your assets are well-protected.

Furthermore, our swift claim settlements minimise any operational delays. With TATA AIG as an insurance partner, businesses can maintain their international trades stress-free.

Frequently Asked Questions

-What is the advantage of DAP from a buyer’s perspective?

DAP offers buyers the advantage of knowing the exact point of delivery and assuming control over the goods upon arrival.

**-What is the key difference between DAP and DDP? **

The key difference between DAP and DDP is that under DAP, the buyer is responsible for customs clearance and import duties, while under DDP, the seller assumes these responsibilities.

Facebook Feeds
Recent Tweets
Facebook Feeds
Recent Tweets

Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

Related Articles

Tata AIG Also Offers Insurance for the below products

Travel Insurance

Two Wheeler Insurance

Health Insurance

Car Insurance

scrollToTop