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Answers · Commodity trade questions

DAP vs DDP: what changes for commodity buyers

Reviewed by the Vanguard Verify desk

By the Vanguard Verify desk · Published 2026-10-26 · Updated 2026-10-26

Short answer: under both DAP and DDP the seller delivers to a named destination and carries transport risk until then. The difference is import clearance: under DAP the buyer clears the goods and pays import duties and taxes; under DDP the seller does. DDP only works if the seller can legally act as, or appoint, the importer in the destination country.

Side-by-side

PointDAP (Delivered at Place)DDP (Delivered Duty Paid)
DeliveryAt named place, ready for unloadingAt named place, ready for unloading
UnloadingBuyer, unless seller's carriage contract covers itBuyer, unless seller's carriage contract covers it
Export clearanceSellerSeller
Import clearanceBuyerSeller
Import duties and taxesBuyerSeller
Risk until deliverySellerSeller

For sea freight terms used in bulk commodities, compare FOB vs CIF and CFR vs CIF.

How to choose and check

  1. Write the rule correctly: "DAP [named place], Incoterms® 2020" or "DDP [named place], Incoterms® 2020". Name the exact warehouse, terminal or address.
  2. Confirm who can be importer of record. The ICC notes that if local rules require the importer to clear the goods, DDP cannot be used and DAP is the right choice.
  3. Check licences. Many commodities (fuel, fertiliser, sugar, rice, wheat) need import permits or quotas held by the importer. Ask who holds them.
  4. Agree unloading costs and demurrage in the contract so they are not paid twice.
  5. Verify the seller. Under DDP the seller handles your customs entry, so check the company in its registry and on GLEIF before giving any import documents.
  6. Remember Incoterms do not cover payment or title. Those belong in the SPA and the payment instrument.

Why it matters for bulk commodities

Most bulk cargoes such as grain, sugar, fertiliser and fuel move on sea terms (FOB, CFR, CIF), where risk passes at the loading port. DAP and DDP are more common for containerised or inland deliveries, or when a supplier sells from a bonded warehouse in the buyer's country. When a seller switches a deal from CIF to DDP, the cost of duty, VAT, port charges and local trucking moves to the seller — so the price must rise accordingly, and the seller must show who will physically clear the goods.

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FAQ

Who pays import duty under DAP?

The buyer. Under DAP the buyer handles import clearance and pays import duties and taxes.

Who unloads under DDP?

The buyer, unless the seller's contract of carriage includes unloading at the named place.

When can DDP not be used?

When destination-country rules require the local importer to clear the goods; ICC guidance says DAP is then the appropriate rule.

Vanguard Verify is run by Vanguard Trade Capital Goods Wholesalers DWC-LLC, Dubai South, Licence 14282. This answer is general information, not legal or financial advice.

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