DAP: Delivered at Place…but what Place?

Improper use of incoterms in your contracts can cost you money!

Our company had a transaction where we (our U.S. entity) purchased material from Japan on a “DAP Miami, Florida” basis.

The incoterm “DAP” means “delivered at place”.

As we have stressed before, it is critical that all incoterms be followed by the location at which buyer takes over. In this case, it looks like that was done.

Normally, this is very straightforward: the seller pays for all transportation and risk up to the agreed-upon location, which they have stated as “Miami, Florida”.

The problem was: there was no actual address agreed-upon, so the seller sent it to the warehouse of their logistics provider in Miami.

We had to pick it up from there!
LWL028 DAP Delivered at Place but what Place1
This was the way it worked before we found out about this practice.

Afterwards, we instructed our supplier to change the Bill of Lading instructions to show our customs broker’s facility.

Do not get stuck with costs that can be avoided. As soon as we found out about this, we put a stop to it and saved at least $215 per shipment!
LWL028 DAP Delivered at Place but what Place2
Stay vigilant…it’s your money!

You can order a copies of Incoterms 2010 by the International Chamber of Commerce at
http://store.iccwbo.org/incoterms-2010.

Good luck!

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About Lenny

Many years of experience in a Fortune 1000 companies, especially in the logistics and I.T. areas of manufacturing companies. Through process improvements and the use of many of the tools mentioned here, I have been able to identify and implement savings opportunities worth up to $10 million. I hope that some of these real-life stories, suggestions and tools can help you!
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