DAT is an International Commercial Term (Incoterm) published by ICC used in the delivery industry that describes the mode of delivery of goods and the roles of importers and exporters in the process.

Incoterms are pre-determined trade terms of the International Chamber of Commerce that are recognized and acknowledged by buyers and sellers in the global trading market.

The incoterm, DAT used to be referred to as DES representing: Delivery at Ship and DEQ representing: Delivery at Quay as the year 2000. Effective from January 2020 however, DAT has been renamed to DPU, i.e. Delivery at Place Unloaded.

The changes were only made to capture the full essence of the term as accurately as possible thus, the terms of the agreement are still binding.

Table of Contents

How does DAT work?

DAT Incoterms
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Whenever items are purchased or sold under the condition of DAT, it implies that the seller is expected to deliver the goods to a location or terminal as previously established in agreement by the transacting parties, e.g. a port, a quay, container yard, warehouse road transport hub etc., after which the buyer takes up full responsibility for the goods.

An essential pre-condition of the agreement is that the delivery point is stated clearly and agreed upon.

After the delivery is completed as agreed, the buyer will have to sort out the import formalities and transportation to the final destination.

DAT has certain similarities and salient differences with and from other incoterms, including DAP and DPP as will be touched on subsequently to help aid understanding.

Summarily, the responsibility of the seller in ‘DAT’ is the delivery of the goods in full to the port/terminal of destination and the unloading of the said goods.

The seller covers all costs and expenses incurred until the endpoint and the buyer, in turn, pays for the customs duties and taxes due at the destination.

It is instructive to note that the seller transfers all liabilities on the goods to the buyer at the endpoint.

DAT was originally intended for (air) port deliveries as against ocean cargo and shipping goodswhich are then moved to a container yard- a container storage facility before they are moved to their final destinations.

Sellers offset bills relating to terminal handling charges while the buyers concern themselves with custom duties, clearance and taxes.

Case Study

In a situation where automobile spare parts are to be transported between China and Canada with Canada being the final destination, the Chinese manufacturers and their Canadian partners could choose to use ‘DAT’ as the delivery modality with a facility at the terminus to receive the auto parts.

The Chinese clear the parts through customs at the port in their home nation and take care of the bills covering the cost of carriage and insurance up until safe delivery in Canada.

Upon successful unloading at the Canadian port facility, the responsibility and risks are duly transferred to the Canadian buyers who then see to the completion of the delivery process.

What are the Peculiarities of DAT?

  • Sellers or suppliers take up responsibility for the transport of goods from origin to destination
  • The importer or buyer handles the importation charges and transportation to the intended location.
  • There is a transfer of risks and liabilities from supplier to importer upon dispatch and unloading at a specified location- the destination.

Advantage of DAT for Buyers

Buyers are assured of getting their goods delivered at the agreed spot and can concern themselves with other clearing and forwarding.

Drawback of DAT for Buyers

The buyer has to take care of the unloading of imported materials and bear the risk of potential damage/loss at the point of delivery before reloading and onward forwarding to the final destination.

Advantage of DAT for Sellers

They only have the responsibility of getting the goods to the port after which their job is done, keeping the difficulty levels considerably low.

Drawback of DAT for Sellers

The possibility of non-compliance with the terms of the agreement by the buyer and possibly failing to take delivery of the goods.

What are Sellers' Obligations under DAT?

1. Licensing

As a seller, you should try to obtain and provide the local authorities in the country of origin with the export licenses or authorization upon request.

These documents permit legal export and will help avoid any challenges that might impede the process and cause a failure to meet up with the demands of the arrangement with the importer.

2. Delivery and Unloading of Goods

As a seller, this is the most obvious and crucial duty and must be done as agreed at the right location and time with the necessary documentation, including invoices or their equivalents and proof of delivery (a document which allows the buyer to pick up goods) for a smooth delivery process. You should prepare to do so.

3. Transportation and Insurance

For a seller, getting the goods across to the destination goes without saying as a vital role which should be covered with all modalities sorted accordingly.

In cases of accidents, fire outbreaks, losses on the high sea, attacks by sea pirates, e.tc., insurance policies, put in place for a buyer helps cushion the effects of the mishaps. You should make plans for those.

4. Costs (Fee and Levies)

You are expected to handle all costs of the goods relating to transport (contract of carriage), loading at the place of origin, export clearance at origin, unloading at the destination, etc.

5. Notice to Buyer

You should serve a notice indicating safe delivery of the goods at the designated destination to the importer or buyer.

This notice functions as proof of compliance with the terms of the agreement on the part of the supplier, a reminder of the deal and it effectively signals the end of the exporter’s input.

6. Checking

As a seller, you should see to the thorough assessment of the goods for quality control and assurances, measurements, counting, packaging, and tagging to ensure all requested items are duly delivered in good shape.

What are Buyers' Obligations under DAT?

1. Payment

As a buyer, you need to make the payment as predetermined in the contract between you and the seller. The payment should cover all fees and levies including importation, custom duties, and taxes.

2. Licenses, Authorization, and Formalities:

Export licenses, import permits, and necessary documentation should be obtained by the buyers to expedite the delivery process and you should be prepared to do so too.

3. Shipping and Insurance

These would have been covered by the supplier but as a buyer, you should monitor it anyway to keep all involved on your toes and to step in should the situation require it.

4. Taking Delivery

This is the most obvious of the duties, is so crucial, and should be at the preferred location and time. You should make sure you are available for this.

5. Transfer of Risks

Responsibility for risks and liabilities in cases of loss or damage is taken up by the buyer once the goods are offloaded at the terminal. You should make arrangements for this.

6. Notice to the Seller

Reciprocally, as an importer, you should send a notification to the supplier acknowledging receipt of the goods detailing the time of shipment arrival and further validating the proof of delivery sent by the exporter. Inspection should be done by you, pre-shipment and upon delivery.

What's the Difference between DAT vs DAP?

The Delivered at Place ‘DAP’ incoterm refers to an agreement between the supplier and buyer in which the former commits to handling all costs of transporting the goods to a named destination (outside the terminal) including fees for:

Delivery point is the port or terminalDelivery point is a named location outside the facility
Losses are covered by the seller before delivery and the buyer afterwards.Losses are covered by the seller

The prominent difference is in the delivery point which is at a location at the port or terminal for DAT and in a named location outside the facility for DAP.

Final Words

Above are the basic knowledge about the Incoterm DAT explained, feel free to leave a comment below if you have any questions.

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