The Difference Between DAP and DPU

Before we discuss the difference between DAP and DPU, it is good to point out that INCOTERM 2020 has 4 predominant rules of INCOTERM: –

  1. E rules – Ex Work
  2. F rules – FCA, FAS, FOB
  3. C rules – CFR, CIF
  4. D rules – DAP, DPU, DDP

The DPU term, or “Delivered at Place Unloaded” is a term that replaces the INCOTERM DDU, or “Delivery Duty Unpaid”. This is a welcome change as it seeks to clarify certain ambiguities in the DDU term.

Difference Between DAP and DPU

Nevertheless, DPU and DDU terms are more or less the same. The only difference is that the DPU term specifically requires the exporter to unload the cargo at the importing country’s place. This place is nominated by the importer of the cargo.

There cannot be any confusion between DAP, “Delivered at Place” term, and DPU, “Delivered at Place Unloaded”. The primary difference between DPU and DAP is the point the importer takes delivery of the cargo, and therefore the point where the transportation risk is transferred to the buyer.

In a DAP, “Delivered at Place” term, the seller has to deliver the goods at a place nominated by the buyer.

Unlike the E rules and the F rules of the INCOTERM, the DAP term allows the buyer to nominate a place that is: –

  1. Near to the buyer’s premise of business
  2. At the buyer’s warehouse storage facility
  3. Any other subsequent final buyers of the cargo

The delivery conditions for a DAP term is deemed successful also only if: –

  1. The delivery meets the delivery date;
  2. The delivery is within an agreed period.

For a DPU, “Delivery at Place Unloaded” term, the seller also has to undertake the responsibility of unloading the cargo at the place nominated by the buyer.

Therefore, the delivery conditions for a DPU term is deemed successful only if: –

  1. The delivery meets the delivery date;
  2. The delivery is within an agreed period;
  3. The goods are unloaded from the arriving means of transportation.

There you have it, the primary difference between DAP, “Delivered at Place” and DPU, “Delivered at Place Unloaded”

Delivery at Place Unloaded

Delivered at Place Unloaded DAP vs DPU

This INCOTERM is covered extensively by many resources. The graph above can give you a guide, either as a buyer or a seller, as to the roles and responsibilities of each party.

There are two contracts at play during an International trade, we have listed it down for you:-

Contract of SalesContract of Carriage
The seller has to “deliver” on his/her promise to supply the cargo goods according to the specifications of the contract of sales.The seller is responsible for arranging the contract of carriage of the goods up to the buyer’s name place.

The INCOTERM’s scope is generally limited to the details of the contract of carriage. Once again for your easy reference, we have tabled it down below.

Terms of Contract of CarriageResponsibility
Delivery up to buyer’s doorSeller
Loading the cargo on the chosen means of transportationSeller
Unloading the cargo from the chosen means of transportationBuyer
Transport Documentation (Bill of Lading)Seller
Inland transport arrangementSeller
Export ClearanceSeller
Import ClearanceSeller, (all necessary import requirements and documentation is provided by the buyer
Applicable Export DutySeller
Applicable Import Duty and TaxBuyer
InsuranceNot Defined
Product Quality ChecksSeller
Product MarkingSeller
Product LabellingSeller

Delivered at Place

Delivered at Place DAP vs DPU

Similar to the INCOTERM DAP, This INCOTERM is covered extensively by many resources. The graph above can give you a guide, either as a buyer or a seller, as to the roles and responsibilities of each party.

There are also two contracts at play during an International trade, we have listed it down for you to refer to easily.  

Contract of SalesContract of Carriage
The seller has to “deliver” on his/her promise to supply the cargo goods according to the specifications of the contract of sales.The seller is responsible for arranging the contract of carriage of the goods up to the buyer’s name place.

The INCOTERM’s scope is generally limited to the details of the contract of carriage. Once again for your easy reference, we have tabled it down below.

Terms of Contract of CarriageResponsibility
Delivery up to buyer’s doorSeller
Loading the cargo on the chosen means of transportationSeller
Unloading the cargo from the chosen means of transportationSeller
Transport Documentation (Bill of Lading)Seller
Inland transport arrangementSeller
Export ClearanceSeller
Import ClearanceSeller, (all necessary import requirements and documentation is provided by the buyer
Applicable Export DutySeller
Applicable Import Duty and TaxBuyer
InsuranceNot Defined
Product Quality ChecksSeller
Product MarkingSeller
Product LabellingSeller

When should you use DAP and DPU

When it comes to concern over which INCOTERM to choose, it comes down to two key factors: –

  1. Transport service’s price
  2. Level of competence

An international transaction invariably follows the law of demand and supply. As long as the buyer is willing to pay a price for a given product or service in exchange, the transaction is successful.

For the INCOTERM DPU and DAP, the price of Delivery Place Unloaded will logically be more expensive as compared to transactions dealt with a Delivered at Place INCOTERM.

There is an inherent risk that the seller bears when performing unloading activities. Firstly, the cargo may be damaged when unloading. The myriad of factors that may cause cargo unloading damage includes: –

  1. Weather damage
  2. Negligence
  3. Insufficient experience in handling the cargo

Not only that, many other factors may cause cargo loss or damage.

As an example, unseaworthy cargo containers cause damage to the cargo as well. There are cases where the container has holes at the top due to corrosion or collision. This may cause damage to the cargo inside as well.

For cargo shipments using the DPU term, the buyer does not need to go through the hassle of filing a formal complaint to the shipping agent, getting an independent surveyor to report the damage, filing an insurance claim with the cargo insurance adjustor, defending the insurance claim with said adjustor…The list goes on.

Of course, all the risk assumed by the seller comes at the cost.

When comparing DPU and DAP INCOTERMs side by side, the buyer may have a level of confidence to assume the responsibilities of unloading the cargo from the seller’s appointed transportation. Therefore, the buyer may not find it justifiable to pay for the assumed cost.  

More Info

At the beginning of the article, we mentioned that there is a total of 11 INCOTERMs to choose from, to successfully perform an international trade requires balancing the cost and risk of transporting the cargo across multiple countries.

Both buyers and sellers have to be wary of that balance.

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What INCOTERM Should I Use

kelvinsee

Hello! I'm Kelvin, I work as a custom broker and I'm thrilled with having the experience to share my industry knowledge with you. I hope that you enjoy reading them as much as I do posting them.

One thought on “The Difference Between DAP and DPU

  1. Helpful summary Kevin, but can you clarify what exactly could be meant by “unloaded from the arriving means of transportation”. eg. For FCLs does this mean consignor is responsible for unpacking FCL at named place, or just lifting FCL onto the ground? Also, if consignee delays customs clearance or site access, where is it written that they are then responsible for detention and demurrage.

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