What's the difference between DDP and DAP?

What's the difference between DDP an...

What's the difference between DDP and DAP?

DDP (Delivered Duty Paid) and DAP (Delivered at Place) are both Incoterms (International Commercial Terms) used in international trade to define the responsibilities of sellers and buyers regarding transportation, risk, and cost of shipping goods. Here's the difference between the two:

DDP (Delivered Duty Paid)

· Seller's Responsibilities: The seller is responsible for all costs and risks associated with delivering the goods to the buyer's specified destination, including transportation, insurance, and import duties and taxes.

· Buyer's Responsibilities: The buyer's only responsibility is to unload the goods at their premises.

· Customs Duties and Taxes: The seller handles customs clearance and pays all import duties and taxes.

· Convenience: This term is very convenient for the buyer since they do not have to worry about customs clearance and additional costs after the goods arrive in their country.

DAP (Delivered at Place)

· Seller's Responsibilities: The seller is responsible for all costs and risks of delivering the goods to a specified place, usually the buyer's premises or another agreed location in the buyer's country.

· Buyer's Responsibilities: The buyer is responsible for unloading the goods at the specified place and for handling customs clearance and paying any import duties and taxes.

· Customs Duties and Taxes: The buyer handles customs clearance and pays any import duties and taxes.

· Convenience: This term splits the responsibilities, where the seller manages the transportation and risks until delivery, but the buyer deals with customs and import-related costs.

Key Differences

1. Customs Duties and Taxes:

l DDP: Seller pays.

l DAP: Buyer pays.

2. Customs Clearance:

l DDP: Seller is responsible.

l DAP: Buyer is responsible.

3. Cost and Risk Transfer Point:

l DDP: Cost and risk remain with the seller until the goods are delivered to the final destination and cleared by customs.

l DAP: Cost and risk transfer to the buyer once the goods reach the specified place but before customs clearance.

In summary, DDP is more comprehensive in terms of seller responsibility, covering all aspects of the delivery, including customs duties and taxes, while DAP involves the seller delivering the goods to a specified location with the buyer handling customs clearance and related costs.