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From the course: International Logistics

Incoterms 2020: DAP, DPU, and DDP

From the course: International Logistics

Incoterms 2020: DAP, DPU, and DDP

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- The next three incoterms focus on the delivery aspect of the international transaction. And they all begin with the letter D. First is DAP, which stands for Delivered at Place. With this rule, the seller is responsible for every aspect until the goods reach the buyer's destination. And this is also designated as the place of delivery. So the exporter has all the risk up to this point. The buyer's responsibility is to accept ownership of the shipment and unload it. The seller provides all documents needed for the trip but the buyer pays the import customs duties. Clearly, from the buyer's perspective, this is a full service contract. Of course, the seller can charge reasonable fees for providing all this service. The next delivery rule is DPU, which is Delivered at Place Unloaded. At first, it sounds just like the DAP rule. The goods are delivered by the seller and the buyer unloads them. But with DPU, the big difference is when and where the delivery takes place, which changes the transfer of ownership, risk, and costs. DPU is designed for container shipments, which move through the logistics network locked, sealed, and unopened. So the place of delivery is the designated container terminal, which can be in the exporting country or the importing country. With DPU, the exporter is responsible for all documents and expenses until the goods reach the container terminal. At this point, the importer becomes responsible for all costs and document requirements. The last rule pertaining to delivery is Delivered Duty Paid or DDP. This is a full service transaction just like DAP and more because now the exporter also pays all customs duties and import taxes. You would only use DAP and DDP rules when the seller is an expert in doing business in both the export and import countries. As a buyer, it's important that you research the exporter's capabilities very thoroughly.

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