DAT, DAP, DDP: How to understand

In international trade, much depends not only on the price and quality of the goods, but also on the quality of the goods. Who is responsible for transportation, insurance and customs duties. It is for the clear distribution of these obligations that the Incoterms rules (Incoterms) A universal set of terms and conditions of supply recognized worldwide.

Three of the most demanded conditions for deliveries "to the door" or "to the destination" are: DAT, DAP and DDP. They often cause confusion among importers and exporters, especially in the first transaction. In this article, we will discuss:

• What do DAT, DAP, DDP mean?
• What's the difference?
• What are their advantages and risks?
• How to choose the right term?

DAT, DAP and DDP – What’s the point?

These terms refer to group of delivery conditions with delivery to the agreed destination:

1. DAT - Delivered at Terminal (Incoterms 2010, replaced by DPU in 2020)

Delivery to the terminal (arrived at the place of unloading, without duties)

DAT assumed that:

• The seller arranges transportation to terminal (port, warehouse, railway station)
• Unloading on.
• Customs duties and internal taxes - the obligation of the buyer

In 2020, DAT was renamed DPU (Delivered at Place Unloaded).To emphasize that delivery can be not only to the terminal, but also to any place where unloading is possible.

2.DAP - Delivered at Place

Delivery to the agreed place without payment of duties

Essence:

• The seller bears the costs and risks of delivery to spot buyer-country
• Unloading not included
• The buyer makes the import and pays duties/VAT

Applicable. direct delivery to the customer warehouse, customs warehouse, distribution center, etc.

Example: The Chinese manufacturer sends cargo to Russia, to a warehouse in the suburbs, but the Russian company itself is engaged in customs clearance. DAP Moscow, buyer's warehouse.

3.DDP - Delivered Duty Paid

Delivery to the place with full payment of duties and taxes

The most “comfortable” option for the buyer:

• The seller undertakes:

delivery

customs clearance in the country of importation

payment import duties, VAT, fees

• Unloading by agreement of the parties

Risks for seller higherespecially if:

• He is not familiar with the customs legislation of the buyer’s country.
• an unstable certification or tax system in the country of import

Table of comparison of conditions

Advantages and disadvantages

DAT/DPU

+ Convenient when working with sea transportation and terminals
- Can cause controversy, who is responsible for unloading under non-standard conditions

DAP

+ Transparent logistics to the buyer’s door
- Does not cover duties and may slow down the process due to uncoordinated customs clearance

DDP

+ As simple as possible for the buyer - the goods "turnkey"
- The seller is responsible for customs, certification, taxes, which can be risky.

When to use what term?

Common mistakes

1. DDP is indicated, but the seller is not registered in the country of the buyer He will not be able to pay VAT.
2. DAP is used, but the parties have not agreed who unloads - leads to downtime
3. Incorrect placement: for example, "DAP Russia" instead of "DAP Moscow, St. XXX, warehouse"

Always specify the exact place and check whether the unloading is included, who issues customs.

DAT, DAP and DDP These are three key terms of delivery focused on delivery of goods to the end point. Understanding the differences between them avoids errors, delays and unnecessary costs in international trade.

DDP Convenient for the buyer, but risky for the seller
DAP Balanced variant with B2B
DPU (formerly DAT) Good for delivery to ports, terminals with enabled unloading