What is DAP?
DAP or Delivered-at-Place is an international trade term, used to describe a deal in which a seller agrees to pay all costs and suffer any potential losses of moving goods sold to a specific location.
Under the Incoterm DAP, the seller has fulfilled his or her obligations when the goods are placed at the disposal of the buyer on the arriving means of transport, ready for unloading at the named place of destination. Under DAP terms, the risk is transferred from the seller to the buyer when the shipment reaches the destination mentioned in the contract of sale.
Once the goods are ready, the seller must arrange, at his own expense, proper packing and all the necessary legal formalities in the origin country. The customs clearance in the importing country is the responsibility of the buyer. Among other things, this includes import permits, required documents by U.S. Customs and Border Protection, and proof of payment of all customs duties and taxes.
Under DAP terms, the seller must bear all expenses for carriage and any terminal expenses, up to the agreed destination point. The buyer, however, is responsible for unloading costs at the final destination.
What are some problems one may face under DAP?
DAP guidelines are some of the clearest, when it comes to trade agreements, however, there are still some situations that result in disputes. Like when the carrier of the goods incurs demurrage charges, which are enforced as a result of failure to unload in time, which in turn, is the result of the proper clearance from one of the parties.