Delivered at Place Unloaded (DPU) is one of eleven Incoterms that stipulate responsibilities for buyers and sellers in the maritime industry. It is the only one that requires the seller to deliver the goods to the buyer’s location. It also states when the risk and costs shift from the seller to the buyer.
Buyers & Sellers’ Obligations When Using Delivered at Place Unloaded (DPU)
DPU clarifies the roles and obligations of both sellers and buyers during the shipping process. It ensures that goods are not only delivered to a specific place, but are also unloaded at that location. Understanding the terms for both the buyer and seller is important while goods move through a complex supply chain, often featuringmultiple shippers, transshipments, and international border crossings.
- Goods, commercial invoice, and documentation: ensure goods are in accordance with the terms of the contract. This includes providing all necessary commercial documentation, such as invoices, certificates, and any other paperwork required for customs clearance
- Export packaging and marking: proper packaging of the goods is crucial for their protection during transit. Accurate labeling and marking are also essential for easy identification and handling during shipment
- Export licenses and customs formalities: prepare the required export licenses and ensure compliance with all customs formalities related to the international shipment
- Loading charges: all expenses associated with loading the goods onto the ship, including labor and equipment costs
- Delivery at named place of destination: ensure that the goods are safely delivered to the specified place of destination, which is typically a port or a specific location agreed upon in the contract
- Proof of delivery: provide documentation confirming the shipment’s successful delivery. This serves as evidence that the goods have reached the agreed-upon destination
- Payment for goods as specified in the sales contract: follow the payment terms outlined in the sales contract, ensuring that payment is made according to the agreed-upon schedule and conditions
- Import formalities and duties: handle all import-related documentation, customs requirements, and any applicable taxes or duties associated with bringing the goods into the importing country
- Cost of import clearance pre-shipment inspection: if pre-shipment inspections are required for import clearance, the buyer is responsible for covering the associated costs
Onward carriage and delivery to the buyer: depending on the terms of the contract and the named place of destination, the buyer may be responsible for arranging and covering the costs of onward carriage and delivery of the goods to their final destinations. This obligation varies based on the specific agreement between the buyer and the seller
Pros and Cons of DPU
Understanding the pros and cons of Delivery at Place Unloaded will help you decide whether this is right for your shipment, or if you should use a different method.
- Convenient delivery: the buyer enjoys the convenience of having the goods delivered to a specified place, which can save time and effort
- Reduced risk: any risk associated with transportation and unloading is born by the seller until the goods are delivered to the agreed-upon place, at which point the risk transfers to the buyer
- Easy for the buyer: the seller must arrange all of the transportation logistics, obtain the necessary documents, and arrange transportation to the buyer’s location
- Limited control: the buyer has limited control over the transportation and delivery process until the goods arrive at the specified place, which may lead to uncertainty about the timing and condition of the goods
- Higher shipping costs: the seller may incur higher shipping and transportation costs, as they are responsible for various expenses related to transporting and unloading the goods
When to Use a Delivered at Place Unloaded (DPU) Incoterm
DPU is typically employed when the buyer desires the goods to be delivered to a specific location, such as their own facility or a designated warehouse, without assuming the burden of unloading the shipment from the transport vehicle, or vessel.
One common scenario where DPU is advantageous is when the buyer lacks the necessary infrastructure or equipment to handle the unloading of goods. By using DPU, the seller takes on this responsibility, ensuring that the goods are safely delivered and unloaded at the agreed-upon place, providing convenience and efficiency for the buyer.
DPU is particularly useful when the seller possesses expertise in international logistics and can efficiently handle the complexities of arranging transportation and ensuring that goods are delivered in compliance with import regulations and customs requirements. In such cases, the buyer can benefit from the seller’s logistical proficiency and focus on other aspects of their business.
The Difference Between Delivered at Place Unloaded and Delivered at Place
Delivered at Place Unloaded and Delivered at Place (DAP) are two incoterms that require the seller to oversee the transportation to the seller. The main difference between the two is the terms of the point of delivery and the responsibilities of the buyer and seller.
Under DPU, the seller is responsible for delivering the goods to a specified place, often a destination port, or another agreed-upon location, and most importantly, the seller is also responsible for unloading the goods at this location. Once the goods are delivered and unloaded, the risk of loss or damage transfers from the seller to the buyer, who then takes on the responsibilities of import customs clearance, payment of duties and taxes, and the onward transportation of the goods to their final destination.
In contrast, DAP requires the seller to deliver the goods to a specified place, but in this case, the seller is not responsible for unloading the goods at the destination. Under DAP, the buyer is responsible for unloading the goods at the specified place and assumes the risk of loss or damage at that point, along with handling import customs clearance, duties and taxes, and onward transportation.