Practical Guide to DAP Terms: Key Considerations After Seller Delivers Goods to Destination

Practical Guide to DAP Terms: Key Considerations After Seller Delivers Goods to Destination

I. Core Principles and Responsibility Boundaries of DAP Terms

1.1 Latest Definition of DAP in Incoterms® 2025

According to ICC 2025 rules, DAP (Delivered at Place) requires the seller to:

• Bear all costs and risks of delivering goods to the specified destination (e.g., buyer’s warehouse, port terminal)
• Complete export clearance procedures
• Excludes unloading, import clearance, and tax payment (key difference from DDP)

1.2 Typical Applicable Scenarios

• Bulk commodity trade: e.g., steel, chemical raw materials (accounting for 63% of China’s DAP exports)
• Cross-border e-commerce large-item logistics: furniture, machinery, etc. (42% growth in Southeast Asia DAP orders in 2025)
• Special regulatory zone transactions: transfer of goods between free trade zones or bonded warehouses

II. Six Key Operations After Goods Arrive at Destination

2.1 Delivery Confirmation Process

1. Arrival notice timeframe
   • Must provide written notice to the buyer 48 hours in advance (2025 adds e-notification compliance requirements)
   • Example: German customs require digital manifests for DAP goods before port arrival
2. Proof of Delivery (POD) management
   • Must obtain POD containing:
     • Buyer’s authorized signature
     • Record of goods’ condition
     • Timestamp accurate to the minute

2.2 Risk Control Points

2.3 Cost Settlement Milestones

• Demurrage cost sharing: Recommend “3+2” model (seller covers first 3 days; buyer pays $50/day thereafter)
• Unexpected cost handling: 2025 rules require sellers to prepay customs deposits with “traceable deduction” noted on invoices

III. Special Requirements for Different Regions

3.1 EU Market

• ICS2 pre-declaration: All DAP shipments must submit e-manifests 4 hours before loading
• VAT deferral trap: If buyer uses deferred payment, add “seller exemption clause” to contracts

3.2 Southeast Asia Market

• COD-related risks: 23% of Indonesia/Thailand DAP orders convert to stranded cargo due to buyer rejection
• Solution:if goods_value > $1000: require 30% deposit else: integrate local warehouse systems (e.g., Lazada LWS)

3.3 US Market

• FDA pre-approval: Food DAP shipments need FFRN codes (7-day processing)
• Port selection strategy: Houston DAP clearance is 2.7 days faster than Los Angeles

IV. Dispute Prevention and Documentation System

4.1 Four Essential Documents to Archive

1. Export license copies (retain for 5 years post-transaction)
2. Temperature logs for perishables
3. Buyer-signed goods condition confirmation
4. Bank payment receipts for all fees

4.2 Smart Contract Applications

• Ethereum blockchain auto-executes:
  When GPS confirms arrival at agreed coordinates, release 50% payment

V. 2025 DAP Upgrade Strategies

5.1 Tax Optimization Paths

• EU: Use Dutch VAT deferral to delay 19% tax payment
• ASEAN: Apply FORM D certificates for tariff reductions (up to 20%)

5.2 Logistics Tech Enhancements

• AR inspection systems: Buyers verify goods via smart glasses
• Dynamic routing: Multi-port分流 based on real-time customs data

VI. DAP Process Checklist