DAP Incoterm vs. DDP Incoterm

Attribute	DAP Incoterm	DDP Incoterm
Delivery	Delivered at Place	Delivered Duty Paid
Responsibility for transportation	Buyer	Seller
Responsibility for import clearance	Buyer	Seller
Responsibility for payment of duties and taxes	Buyer	Seller
Delivery location	Agreed place of destination	Agreed place of destination

Definition of DAP Incoterm

DAP, which stands for Delivered at Place, is an Incoterm that specifies that the seller is responsible for delivering the goods to a named place agreed upon with the buyer. Under DAP, the seller bears all risks and costs associated with transporting the goods to the agreed-upon destination. Once the goods are delivered, the buyer assumes responsibility for any further transportation costs and risks.

Definition of DDP Incoterm

DDP, which stands for Delivered Duty Paid, is an Incoterm that places the maximum responsibility on the seller. Under DDP, the seller is responsible for delivering the goods to the buyer's premises, including paying for all costs and risks associated with transportation, customs clearance, and duties. The seller essentially takes care of all aspects of the delivery process until the goods are in the buyer's possession.

Responsibilities of the Seller

When comparing DAP and DDP, it is important to note the differences in the responsibilities of the seller. Under DAP, the seller is responsible for delivering the goods to the agreed-upon place, but the buyer assumes responsibility once the goods are delivered. On the other hand, under DDP, the seller is responsible for delivering the goods all the way to the buyer's premises, including handling customs clearance and duties.

Risks and Costs

One of the key differences between DAP and DDP is the allocation of risks and costs. With DAP, the seller bears the risks and costs of transporting the goods to the agreed-upon place, but the buyer takes over once the goods are delivered. In contrast, with DDP, the seller is responsible for all risks and costs associated with delivering the goods to the buyer's premises, including customs duties and clearance.

Customs Clearance

Another important aspect to consider when comparing DAP and DDP is the handling of customs clearance. Under DAP, the buyer is responsible for customs clearance once the goods are delivered to the agreed-upon place. This means that the buyer must handle any customs procedures and pay any associated duties or taxes. On the other hand, with DDP, the seller takes care of all customs clearance procedures and pays any duties or taxes on behalf of the buyer.

Delivery Location

When it comes to the delivery location, DAP and DDP also differ in terms of where the goods are delivered. With DAP, the goods are delivered to a named place agreed upon by the buyer and seller. Once the goods are delivered to this place, the buyer assumes responsibility for further transportation. In contrast, with DDP, the goods are delivered all the way to the buyer's premises, eliminating the need for the buyer to arrange for further transportation.

Conclusion

In conclusion, while both DAP and DDP are Incoterms that involve the seller taking responsibility for delivering the goods, there are key differences between the two. DAP places the responsibility on the seller to deliver the goods to a named place, with the buyer taking over once the goods are delivered. On the other hand, DDP places maximum responsibility on the seller, who is responsible for delivering the goods all the way to the buyer's premises, including handling customs clearance and duties. When choosing between DAP and DDP, it is important to consider factors such as risks, costs, customs clearance, and delivery location to determine which option best suits the needs of the buyer and seller.