What is DAP? Transfer of risk and the difference from DDP

What DAP means

DAP stands for Delivered at Place. It is one of the eleven rules in the Incoterms 2020 set published by the International Chamber of Commerce (ICC).

The essence of the rule is this: the seller carries the goods to the place of destination named in the contract and there places them at the buyer’s disposal on the arriving means of transport, ready for unloading. Delivery happens at exactly that moment. Unloading the goods from the vehicle is not the seller’s job.

DAP can be used with any mode of transport: road, sea, air, rail and combined intermodal carriage. It can also be used for container cargo; if the place of delivery is a container terminal, see the warning below. It is one of the three rules in Incoterms’ D group; the other two are DPU and DDP.

How the place of destination is written matters a great deal. A broad phrase such as “DAP Türkiye” is useless. The place must be defined down to the city, the address and, where possible, the specific gate or loading bay.

One point should be clear from the outset: Incoterms rules do not govern when ownership of the goods passes, how payment is to be made, which law applies to the contract, or where a dispute is to be resolved. These are separate clauses of the sales contract.

Where cost and risk transfer

Under DAP, cost and risk essentially change hands at the same point: at the named place of destination, on the arriving means of transport (see below for the unloading-cost exception). The rules under which cost and risk split at different points are the C group — CPT, CIP, CFR and CIF. Under CIF, for example, the seller pays freight to the port of destination but risk passes to the buyer at the port of loading when the goods are loaded on board. DAP creates less confusion in this respect.

Everything up to the moment of delivery is the seller’s: loading at origin, the main carriage, transit through third countries, export customs formalities and the risk of damage or loss en route. Everything after the moment of delivery is the buyer’s: unloading, the import declaration, customs duty and VAT, and inland carriage beyond the place of destination.

The real subtlety lies in the unloading charge. If the carriage contract the seller has taken out also covers the unloading charge at the place of destination, that charge stays with the seller; unless the parties agree otherwise, the seller cannot claim it back from the buyer. “Who physically does the unloading” and “who pays the invoice” are separate questions, and both should be spelled out in the contract.

On insurance, DAP places no obligation on either party. Under Incoterms 2020 the obligation to take out insurance exists only under CIF and CIP. Because the seller carries the risk up to the place of destination, the seller usually chooses to take out insurance for its own benefit anyway; this is a commercial precaution, not a requirement of the rule.

Item	Seller	Buyer
Export customs formalities and duties	Yes	—
Loading at the place of departure	Yes	—
Main carriage (freight)	Yes	—
Transit formalities through third countries	Yes	—
Risk of damage/loss up to the place of destination	Yes	—
Insurance	Not compulsory (usually taken out anyway, since the seller bears the risk)	Not compulsory (own risk after delivery)
Unloading at the place of destination	— (cost stays with the seller if its contract of carriage includes unloading)	Yes (physical unloading and equipment)
Import customs declaration and permits	—	Yes
Customs duty, VAT and other import charges	—	Yes
Inland carriage after delivery	—	Yes

Seller’s obligations

• Provide the goods and the commercial invoice in conformity with the sales contract.
• Complete export customs formalities and obtain the necessary export permits and licences.
• Contract for carriage to the place of destination and pay the freight.
• Bear the customs formalities of any countries transited.
• Place the goods at the buyer’s disposal at the named place of destination, on the means of transport, ready for unloading.
• Bear the risk of damage and loss up to the moment of delivery.
• Give the buyer timely notice so the buyer can take delivery of the goods.
• Assist the buyer, at the buyer’s request and risk and expense, with documents and information needed for import.

Buyer’s obligations

• Pay the price stated in the contract.
• Take delivery of the goods at the place of destination while they are still on the means of transport.
• Carry out unloading; prepare the necessary equipment, personnel and space.
• File the import customs declaration; pay customs duty, VAT and other import charges.
• Meet entry requirements such as import licences, conformity certificates, inspection or analysis.
• Bear all risk and cost from the moment of delivery onward.
• If it has the right to choose the delivery time or a specific point within the place of destination, notify the seller in good time.

The difference between DAP, DPU and DDP

All three rules belong to the D group, and under all three the seller brings the goods to the country of destination. The difference is in the detail, and in practice these three are the ones most often confused.

• DAP: the seller does not unload and does not pay import duties.
• DPU (Delivered at Place Unloaded): the seller delivers the goods by unloading them from the means of transport. It replaced the former DAT rule in Incoterms 2020 and is the only rule that places an unloading obligation on the seller. Import customs and duties still fall on the buyer.
• DDP (Delivered Duty Paid): the seller also carries out import customs formalities and pays customs duty and other import taxes. Unloading is still the buyer’s.

In short, the only difference between DAP and DPU is unloading, and the only difference between DAP and DDP is import customs and duties.

When it is the right choice

• When the buyer is registered as an importer in its own country and can carry out the customs process itself.
• When the seller wants to take responsibility for carriage all the way to the buyer’s door and quote a single price.
• When import duties, sector-specific permits or tax-refund mechanisms in the country of destination would be hard for the seller to manage; DAP leaves this burden with its natural owner.
• When the buyer’s premises have unloading facilities such as a forklift, crane or loading bay.
• For full-truckload road shipments where the vehicle can drive directly to the buyer’s address.

When it is the wrong choice

• When the buyer has no means to unload. For heavy or project-type cargo, if the buyer lacks suitable equipment the vehicle waits at arrival and waiting costs are incurred. DPU is more suitable in such cases.
• When the place of delivery is a port or terminal. Leaving a container “on the vehicle, ready to be unloaded” at a container terminal makes little practical sense; terminal operations already include unloading. The rule does not prohibit a terminal as the place of destination, and DAP with a terminal address is widely used; however, ICC guidance is to use DPU where the seller is to unload.
• When the buyer is not an importer. If the buyer has no tax registration in the country of destination or is not in a position to file a declaration, the goods wait in customs. In this scenario, either DDP should be considered or a registered importer in the destination country should be identified.
• When payment depends on a letter of credit and this is overlooked. Under DAP, delivery takes place on arrival, whereas a letter of credit is usually based on a transport document issued at the time of loading. The documentary requirements and the delivery term must not conflict with each other.

Common mistakes

• Not stating in the contract who owns the unloading equipment. DAP leaves unloading to the buyer but does not say who is to supply the equipment, how long the vehicle can wait free of charge, or who bears the waiting charge. If these are not in writing, the negotiation starts on arrival, with the goods sitting on the vehicle.
• Leaving the cost of an import delay undefined. If the buyer delays the declaration, the container stays at the port and demurrage, storage and terminal charges start running. Incoterms places the additional costs arising from the buyer’s failure to meet its import obligation on the buyer; but if the invoice is first issued to the seller or its carrier, collecting it becomes a separate problem. Who bears the free time and the delay cost should be written into the contract.
• Writing the place of destination vaguely. “DAP Istanbul” does not define the point of delivery; the specific address and gate where delivery is to take place must be defined.
• Assuming DAP means “everything included.” The DAP price does not include import duties. The buyer’s total cost is the invoice amount plus customs duty, VAT and unloading cost.
• Not stating the Incoterms version. If the contract does not say “Incoterms® 2020,” which version applies remains open to dispute.
• Assuming insurance automatically. DAP does not create an insurance obligation. Whether the cargo is insured, and the scope of the policy, should be confirmed separately.

If it is unclear from the start who will handle the declaration and duty process on the import side, clarifying this with the customs broker before the shipment departs prevents waiting costs from building up on arrival.