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Incoterms Definitions Part 3: DAT, DAP, DDP

  
  
  

Incoterms GuyToday's Incoterms are brought to you by the letter D.

D is for Delivery.

Too Sesame Street? Then let's get right into the final installment of the Incoterms explanation blog series. 

If you missed the last few blogs, click here for Group C Incoterms definitions, click here for Group E and Group F Incoterms, or click here for an introduction to Incoterms.

I might miss writing about these little tigers.

Here is where the simplification of 2010 really comes into play. The D group describes different methods of delivery of goods and represents the arrangements with the maximum amount of responsibility (both for costs and risks) to the seller, not the buyer. There used to be 5 acronyms in the D group total. Now there are only 3.

Previously, there were 3 terms used to indicate where goods were to be delivered, i.e. DAF, “Delivered at Frontier"; DES, "Delivered Ex Ship"; DEQ, "Delivered at Quay”. Now those 3 terms have been simplified.

The delivery location is now identified simply as DAT or DAP – “Delivered at Terminal” or “Delivered at Place”. The reasoning is that the increase in point-to-point sales and containerization made the other terms obsolete.[1]

Lastly, the term DDUP – “Delivery Duty Unpaid” - has been eliminated completely.[2] I guess there's no getting out of paying duty which leaves the term DDP – “Delivery Duty Paid”. 

Look out because plenty of websites are still sporting the old terms and presumably still wresting with the ambiguities caused by the old terms. You want to be careful because these ambiguities can muddle your international shipping agreement and cost you more than you calculated!

Now for the final Incoterms and their definitions.

  1. DAT – Delivered at Terminal

Definition: This term means that the seller covers all the costs of transport (export fees, carriage, insurance, and destination port charges) and assumes all risk until after the goods are unloaded at the terminal.[3] “Terminal” includes any place, whether covered or not, such as a quay, warehouse, container yard or road, rail or air cargo terminal.[4] The buyer covers the cost of transporting the goods from the terminal or port to final destination and pays the import duty/taxes/customs costs.

Note: With this arrangement, the seller assumes a large portion of the risks and costs of transport. This term applies to any mode of transport.

  1. DAP - Delivered at Place

Definition: This term means that the seller pays all the costs of transportation (export fees, carriage, insurance, and destination port charges) up to and including the delivery of the goods to the final destination. The buyer is responsible to pay only the import duty/taxes/customs costs. The buyer also is responsible to unload the goods from the vehicle at the final destination.[5]

Note: The big difference between DAP and DAT is that with DAP the seller is responsible for the final leg of the journey and the buyer is responsible for the final unloading of the goods. This term applies to any mode of transport.

  1. DDP – Delivered Duty Paid

Definition: This term means that the seller assumes all the risks and costs of transport (export fees, carriage, insurance, and destination port charges, delivery to the final destination) and pays any import customs/duty.[6] The buyer has only to unload the goods at the final destination.[7]

Note: AKA the non-Incoterm "Free In Store” (FIS), DDP represents maximum responsibility for both costs and risk assumption from beginning to end to the seller. This arrangement is the opposite end of the spectrum from ExWorks (EXW) where the majority of the cost and risk assumption is on the shoulders of the buyer.[8] This term applies to any mode of transport.

Incoterms Guide

 

Well, that’s all folks--!

Oh dear, I've gone from Sesame Street to Looney Tunes.

Anyway, your comprehensive guide to the newest Incoterms 2010 is complete.

Don’t forget our Incoterms guide for quick reference is always here for you and should be much more useful now that you are familiar with the meaning of the Incoterms!

 

 

Comments

i like the explanation but some amendments need to be made on DDP
Posted @ Monday, June 24, 2013 5:45 AM by muhiirwe living
Booking of imports on DAP terms which exchange rate is applicable bl date or date on which matl reaches discharge port.
Posted @ Tuesday, June 25, 2013 3:46 AM by
My inquiry is the how paying is accomplished in the DAP import & export term ? 
what about the documents eg, "B/L" concerning the goods the original ones how to be be handled 
are they to be sent to the buyer bank or directly to the buyer ? 
 
Thanks
Posted @ Thursday, July 25, 2013 4:04 AM by Hussein
i like the explaination
Posted @ Friday, August 16, 2013 11:56 PM by saby
Wow, thank you so much for pointing out the difference between DAP and DAT. I had totally failed to figure it out
Posted @ Friday, December 06, 2013 2:28 PM by Tushabe Christalbel
in paying customs duties and taxes, in order to derive the dutiable value of the goods shall we deduct the cost of transport and other expenses incurred by the seller from the amount of invoice if it is using the incoterm "ddu"?
Posted @ Thursday, February 06, 2014 8:35 AM by evan araya
Excellent explanation. 
Thanks a lot.
Posted @ Monday, February 17, 2014 10:14 PM by Tun Nyein
Good evening! 
According to above, terms DAT & DDP seem to be very very similar. 
So I wonder wht's the difference between the 2 terms??? 
Tks in advance and best rgds 
DOMENICO
Posted @ Friday, May 23, 2014 6:45 PM by DOMENICO CARROCCIA
Hi Domenico,  
 
The difference is who pays the import customs/duty. In DAT, the buyer pays the import customs/duty. With DDP, the seller pays the import customs/duty. 
 
Thanks!
Posted @ Saturday, May 24, 2014 1:31 AM by Jared
Hi, sir: 
 
I deal with brazil customer by DAP, There produced a wharf/Warehouse storage costs in the Brazilian customs clearance process, I would like to ask the wharf or warehouse storage charges occurred should be paid by the buyer or seller to pay? 
 
Thanks so much for your help to clarify according to Inctoerms.
Posted @ Thursday, September 04, 2014 9:48 PM by Xiang linfa
Hello Xiang, 
 
Brazilian Customs can be very tricky in all aspects. And as always, specific deals and agreements between seller/shipper and buyer/cnee superceeds any incoterms. 
 
However, typically with a DAP shipment, the shipper/supplier is responsible.
Posted @ Monday, September 08, 2014 2:32 PM by Raymond Rau
Someone please tell me what is cash customer ?? And how we will identify it from airwaybill???
Posted @ Tuesday, September 09, 2014 3:33 PM by Ajay Jolly
This is a good post indeed full of information and knowledge. These terms DAT, DAP and DDP made the work easier than before. Well I thank you for sharing this melbourne online homework help is informative post it was a great deal of help for me. 
Posted @ Thursday, September 11, 2014 8:03 AM by Daniel Martinez
in paying customs duties and taxes,how do i derive dutable valve-C&I.should i deduct transport and other charges from the invoice value?if am using incoterm DAP.Please advise me  
 
Best regards
Posted @ Thursday, September 18, 2014 2:54 AM by Kgina Eliab
Customs Duty and Tax is based solely on the Invoiced Cargo Value from the Shipper / Supplier. This is case regardless of which incoterm the shipment is under.
Posted @ Thursday, September 18, 2014 4:15 PM by Raymond Rau
Well like the post very much and really i am always after such reads. text loans 
Posted @ Friday, September 19, 2014 5:21 AM by Alexander
Under DAP terms that were negotiated more than 15 years ago, which party is responsible for the chassis fees since the carriers no longer supply them. Specifically, what if tri-axle chassis are required. Which party is responsible for payment?
Posted @ Thursday, September 25, 2014 7:13 PM by Rhonda Ramsay
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