What is Incoterms?
Learning the Language of Incoterms Rules and Trade Terms
Incoterms are terms used in the shipping industry to define the sales contract of shipping products across international borders. They are generally used in sea freight, but they have also been adopted into the air freight industry to outline the responsibilities and risks to be placed on the seller and receiver during an international trade process.
You might come across acronyms like DAP and DTP when you’re in talks about customs clearance. DAP and DTP, both Incoterms as defined by the International Chamber of Commerce, play key roles in global commerce. Let’s take a look at its differences.
Delivered at Place (DAP) indicates that import duties and taxes are not paid for prior to arriving in the destination country. The receiver will have to pay for import duties and taxes when the item arrives at the destination country’s customs. Duties and Taxes Paid (DTP) indicates that the shipper arranges to pay for import duties and taxes in advance.