由 lltx1822 The Choice of Trade Terms: Risk Bearing and Coping Strategies of DAP and DDP
There are significant differences in risk bearing between DAP and DDP. Both trading parties need to clearly understand these risks and formulate corresponding coping strategies to ensure the smooth progress of trade activities.
Under the DAP term, the risks borne by the seller are mainly concentrated in the stage before the goods are delivered to the buyer. During the transportation process, the goods may face various risks, such as natural disasters, traffic accidents, pirate attacks, goods damage, and loss. These risks are borne by the seller before the goods are delivered to the buyer. For example, a cargo ship carrying Chinese goods exported to the Netherlands encountered a storm at sea, and part of the goods were damaged. Under the DAP term, this part of the loss is borne by the seller. In addition, the seller also needs to bear the risk of failing to deliver the goods on time due to their own reasons, such as production delays and improper transportation arrangements. However, since the seller is not responsible for import customs clearance, it avoids risks caused by changes in the customs policies of the importing country and cumbersome customs clearance procedures.
For DAP sellers, the following strategies can be adopted to deal with risks. In terms of goods transportation, choose carriers with good reputation and strong strength and purchase sufficient cargo transportation insurance to transfer the risks during the transportation process. When signing the contract, clearly stipulate the delivery time and place of the goods, reasonably arrange the production and transportation plan, and ensure the timely delivery of the goods. At the same time, strengthen communication with the buyer, promptly understand the buyer’s needs and dynamics, and avoid risks caused by information 不畅.
Under the DDP term, the scope of risks borne by the seller is wider. In addition to the transportation risks in the DAP mode, the seller also needs to bear various risks during the import customs clearance process. Changes in the customs policies of the importing country, adjustments to tariff rates, incomplete or inaccurate customs clearance documents, etc., may all lead to delays in the customs clearance of goods or even the detention and fines of the goods by the customs. For example, when a Chinese enterprise exported products to the United States using the DDP term, due to insufficient understanding of the newly introduced environmental protection regulations in the United States, the goods were required to supplement relevant certification documents during customs clearance, resulting in the goods being detained at the port for many days and generating high storage fees and late fees. In addition, the seller also needs to bear the risk of exchange rate fluctuations because under the DDP mode, the seller needs to advance import taxes and fees, and unfavorable changes in exchange rates may increase the seller’s costs.
The risk response strategies for DDP sellers include strengthening the study of the policies and regulations of the importing country, promptly understanding policy dynamics, and ensuring that the goods meet the requirements of the importing country. Establish long-term cooperative relationships with professional customs clearance agents and rely on their professional knowledge and experience to complete customs clearance procedures smoothly. Include exchange rate adjustment clauses in the contract or use financial instruments for exchange rate risk management to reduce losses caused by exchange rate fluctuations. At the same time, set aside a certain amount of risk reserve funds to cope with possible additional expenses and losses.