由 lltx1822 DAP vs DDP: The Divide of Responsibilities and Risks in International Trade Terms
In the system of international trade terms, although both Delivered at Place (DAP) and Delivered Duty Paid (DDP) involve delivery at the destination, the division of responsibilities and risks is significantly different, making them a crucial dividing line in trade decision-making.
Under the DAP term, the seller is responsible for all risks and costs until the goods are placed at the disposal of the buyer at the named place of destination. However, the seller is not responsible for handling import customs formalities or paying import duties and other import taxes. This means that the seller only needs to transport the goods to the designated location in the importing country, such as a port, airport, or inland warehouse, to fulfill the delivery obligation. Subsequently, the buyer is responsible for handling import customs clearance, picking up the goods, and other matters. For example, when a Chinese electronic equipment manufacturer exports products to Germany using the DAP term, the delivery is completed once the goods are transported to the designated warehouse in Frankfurt, Germany. After that, the German buyer needs to handle the customs clearance procedures on their own, pay customs duties and value-added tax, and pick up the goods. In this mode, the seller’s responsibilities are relatively clear. They do not need to have an in-depth understanding of the complex customs clearance policies and tax regulations of the importing country, reducing the risks caused by unfamiliarity with the policies.
The DDP term requires the seller to bear all risks and costs of transporting the goods to the named place of destination in the importing country, including handling import customs formalities and paying customs duties, value-added tax, and other import taxes until the goods are available for the buyer to take delivery. Taking the example of the Chinese electronic equipment manufacturer exporting to Germany again, if the DDP term is used, the seller is not only responsible for the transportation of the goods but also needs to be familiar with Germany’s customs policies, accurately calculate and pay various taxes and fees, and deliver the goods to the buyer after completing customs clearance. This places extremely high demands on the seller’s comprehensive capabilities, requiring strong logistics integration capabilities, rich customs affairs experience, and sufficient financial resources.
In terms of advantages, for the seller, the greatest advantage of DAP lies in the limited nature of responsibilities and risks, allowing them to focus on the production and export transportation of goods. For the buyer, DAP gives them control over the import customs clearance process, enabling them to independently choose a customs clearance agent and flexibly arrange the goods pickup time. The advantage of DDP is that it provides the buyer with a true one-stop service, which is especially suitable for buyers who lack international trade experience or resources, enhancing the seller’s attractiveness in market competition. However, DDP also exposes the seller to significant risks. Once there are changes in the policies of the importing country, adjustments to taxes and fees, or problems in customs clearance, the seller will face risks such as increased costs and goods detention.