What are Incoterms?
Incoterms (International Commercial Terms) are globally standardized rules that define the responsibilities of buyers and sellers during the shipping of goods. Developed by the International Chamber of Commerce (ICC), these terms are essential for ensuring clear communication in international trade.
Why are they important?
Incoterms specify who handles each aspect of shipping — including costs, risks, and customs processes — and where the transfer of responsibility occurs between the buyer and seller. This clarity prevents misunderstandings and disputes in global trade.
DAP vs. DDP
1. DAP (Delivered At Place)
|
Seller's Responsibility Covers delivery to the agreed location but does not handle customs clearance or import duties. |
Buyer's Responsibility Responsible for customs duties, taxes, and final clearance upon arrival. |
2. DDP (Delivered Duty Paid)
|
Seller's Responsibility Manages everything, including customs duties, import taxes, and delivery to the final location. |
Buyer's Responsibility Simply receives the goods with all costs and customs handled by the seller. |
Key Difference
The main distinction lies in customs clearance and duties. With DAP, the buyer handles these; with DDP, the seller takes full responsibility.
Need More Information?
- For a full list of Incoterms and the latest updates, visit the official ICC Website.
- For a more detailed explanation, check out our blog: What are Incoterms 2024? Simply explained!