Delivered At Place & Delivered At Place Unloaded
This article is part of our weekly blog series on the Incoterms® Rules — we will be looking at a new term every Tuesday
DAP and DPU are nearly identical Incoterms® but with a key difference.
➤ The difference is that under DPU, the seller must also arrange for the unloading of the goods at the agreed destination, and is responsible for all costs and risks up until this point.
Under DAP, risks and costs are the responsibility of the seller up to the delivery/arrival of the goods at the agreed destination, ready to be unloaded. It is crucial that the buyer and seller specify the destination clearly, as arrival at this destination transfers the shipment from the seller’s responsibility to the buyer’s responsibility.
Under DPU, risks and costs are the responsibility of the seller up to the delivery/arrival AND unloading of the goods at the agreed destination. It is crucial that the buyer and seller specify the destination clearly, as arrival at this destination transfers the shipment from the seller’s responsibility to the buyer’s responsibility.
The Incoterms® 2020 Rules explain that the buyer is responsible for all import Customs requirements under DAP and DPU, and advise that the parties should ship DDP if they would prefer the seller to handle both export and import clearance, including duties owed (Incoterms® 2020: ICC Rules For the Use of Domestic and International Trade Terms, pg. 64).
The buyer is a shoe retailer based in Houston TX, purchasing $5000 in leather shoes from 123 Shoe Manufacturer in London, UK. The buyer and seller agree upon a final destination of the buyer’s warehouse in Houston, TX.
If the terms are DAP Houston, the seller must arrange for and pay the cost of carriage to Houston, as well as arrange delivery of the leather shoes to the buyer’s warehouse as the named place of destination. Upon arrival at the warehouse, responsibility transfers from the seller to the buyer.
If the terms are DPU Houston, the seller will also be responsible for unloading the goods at the buyer’s warehouse, and assumes all risks and costs involved.
The ICC has provided a very helpful illustration of Incoterms® that you can download here for free. It shows how in working down the list of incoterms, risk progressively changes from the buyer’s responsibility to the seller’s responsibility.
Incoterms® consists of a total of 11 trade terms, which are divided into two groups.
Group 1 consists of terms that can be used for any mode of transportation:
• EXW Ex Works
• FCA Free Carrier
• CPT Carriage Paid To
• CIP Carriage and Insurance Paid To
• DPU Delivered at Place Unloaded – today’s topic!
• DAP Delivered at Place – today’s topic!
• DDP Delivered Duty Paid
Group 2 consists of terms that apply to sea and inland waterway transport only:
• FAS Free Alongside Ship
• FOB Free on Board
• CFR Cost and Freight
• CIF Cost, Insurance, and Freight
This blog series is intended to be a helpful introduction to international trade terms, not a comprehensive resource. C J International recognizes that the ICC is the only official source of definitions and explanations surrounding the Incoterms® Rules, and advises our clients and the shipping community to consult iccwbo.org and their educational materials for further details.
Incoterms® and the Incoterms® 2020 logo are trademarks of ICC. Use of these trademarks does not imply association with, approval of or sponsorship by ICC unless specifically stated above. The Incoterms® Rules are protected by copyright owned by ICC. Further information on the Incoterms® Rules may be obtained from the ICC website iccwbo.org.