DAP

DAP is the Incoterm where the seller delivers the cargo to a named destination address ready for unloading. The seller arranges and pays for everything from the factory to the destination: inland transport in China, export clearance, sea or air freight, destination port handling, and final delivery to the buyer’s site. The seller stops short of two things: paying import duties, and clearing the cargo through destination customs. Those remain the buyer’s responsibility.

What DAP Houston actually covers and what it doesn’t

Under DAP Houston (or DAP Sydney, or DAP Rotterdam), the Chinese seller is responsible for:

• Producing the goods to specification
• Export packaging including UN-certified packaging for DG cargo
• Inland transport from factory to the Chinese load port
• Chinese export customs clearance
• Sea or air freight to the destination
• Destination terminal handling
• Inland transport from the destination port to the buyer’s named address
• Producing the bill of lading, commercial invoice, packing list, COA, and MSDS
• Marine cargo insurance is not a strict DAP requirement, but most sellers carry it because the risk is on them until the named place

The seller is not responsible for:

• Destination import customs clearance (the buyer files)
• Import duties, VAT, and other destination taxes
• Unloading at the buyer’s site (the buyer unloads)

DAP vs DDP: the customs and duty split

The single difference between DAP and DDP is who clears destination customs and pays the duty. Under DDP the seller does both. Under DAP the buyer does both. For a Chinese factory selling into the United States, this distinction matters because US import duties on chemicals can include MFN tariff plus Section 301 plus, for some products, anti-dumping duty. A factory quoting DDP USA must absorb all of that or pre-bill the buyer. Most Chinese factories will not quote DDP USA for that reason. They will quote DAP USA, which puts the duty calculation back on the buyer.

For cargo into Australia under ChAFTA where most chemicals enter at zero MFN tariff, the DAP-vs-DDP gap is smaller and DDP is more achievable.

When DAP is the right choice

DAP works well when:

1. The buyer wants door-delivered cargo but has a customs broker on retainer. The seller handles the long, complex transport leg. The buyer’s broker handles the short, jurisdiction-specific customs leg.
2. Duty is significant and uncertain. The buyer can absorb duty on their own books and recover it through pricing or duty drawback more cleanly than the seller pre-billing it.
3. The buyer wants a single FOB-plus-freight price line for budgeting. DAP gives one number to the named address. Customs and duty are budgeted separately.

When DAP is the wrong choice

DAP is inappropriate when:

1. The buyer has no licensed customs broker at the destination. Cargo arrives at port. Cargo cannot move without customs clearance. Cargo accrues demurrage while the buyer scrambles to retain a broker. Use DDP if you cannot arrange a broker in advance.
2. The product is on an active anti-dumping order. The duty exposure can change between order and arrival. The buyer must own that exposure, which means the buyer must own the customs entry. DAP keeps that on the buyer.
3. For LCL or low-volume shipments where the destination delivery economics do not justify the seller running a foreign-side trucking operation. FOB or CFR with the buyer’s own forwarder is usually cheaper.

What DAP Houston really means in a Chinese factory quote

When a Chinese factory writes “USD 1,520 / MT DAP Houston,” that price covers the cargo delivered to a Houston address ready for unloading. It does not include US customs clearance, duty, or unloading. Confirm the basis by writing “DAP [exact street address], Houston, TX (Incoterms 2020)” on the purchase order. The address matters because DAP is delivery to a named place, not a city.

Related Incoterms

DDP: seller delivers door-to-door, all costs and duties paid. FCA: seller delivers to a named carrier in the country of origin. CIP: multimodal carriage and insurance paid to destination, but risk transfers earlier than DAP.