What is DPU? – DPU incoterms 2020 (Delivered at Place Unloaded) is the latest version of DPU ICC’s Incoterms. Delivered at Place Unloaded is belong to group Group D (Arrival) assumes that the seller is obliged to deliver the goods to a specific place or the port of destination. This group includes such Incoterms as DAP, DPU, and DDP.
What is DPU – Delivered at Place Unloaded?
Delivered at Place Unloaded means that the seller delivers the goods – and transfers risk – to the buyer:
- When the goods, once unloaded from the arriving means of transport, are placed at the disposal of the buyer at a named place of destination;
- When the goods, once unloaded from the arriving means of transport, are placed at the disposal of the buyer at the agreed point within that place, if any such point is agreed.
The seller bears all risks involved in bringing the goods to and unloading them at the named place of destination. In this Incoterms rule, therefore, the delivery and arrival at destination are the same. DPU is the only Incoterms rule that requires the seller to unload goods at destination. The seller should therefore ensure that it is in a position to organize unloading at the named place. Should the parties intend the seller not to bear the risk and cost of unloading, the DPU rule should be avoided and DAP should be used instead.
This rule may be used irrespective of the mode of transport selected and may also be used where more than one mode of transport is employed.
The parties are well advised to specify to the destination place or point as clearly as possible and this for several reasons.
First, risk of loss of or damage to the goods transfers to the buyer at the point of delivery/destination – and it is best for the seller and the buyer to be clear about the point at which that critical transfer happens.
Secondly, the costs before that place or point of delivery/destination are for the account of the seller and the costs after that place or point are for the account of the buyer.
Thirdly, the seller must contract or arrange for the carriage of the goods to the agreed place or point of delivery/destination. If it fails to do so, the seller is in breach of its obligations under this rule and will be liable to the buyer for any ensuing loss. The seller would, for example, be responsible for any additional costs levied by the carrier to the buyer for any additional on-carriage.
Incoterms 2020 DPU requires the seller to clear the goods for export, where applicable. However, the seller has no obligation to clear the goods for import or for post-delivery transit through third countries, to pay any import duty or to carry out any import customs formalities.
As a result, if the buyer fails to organize import clearance, the goods will be held up at a port or inland terminal in the destination country. Who bears the risk of any loss that might occur while the goods are thus held up at the port of entry in the destination country? The answer is the buyer: delivery will not have occurred yet, ensuring that the risk of loss of or damage to the goods is with the buyer until transit to a named inland point can be resumed.
If, in order to avoid this scenario, the parties intend the seller to clear the goods for import, pay any import duty or tax and carry out any import customs formalities, the parties might consider using DDP.
DPU – Delivered at Place Unloaded’s Cost and obligation
Blue: Cost/ Yellow: Risk/ Orange: Insurance
Using Incoterms 2020 DPU, the seller bears costs
- Export and transit costs (outside the importing country): customs, taxes, export and transit permits, export security clearance and the cost of obtaining all official permits;
- The costs of control activities, such as quality control, measurement, weighing, counting, delivery of appropriately labeled packaging;
- The costs related to shipping and transport of the goods until they are unloaded and delivered to the buyer;
- The costs needed to obtain documents and information related to export and transit clearance;
- The costs related to concluding the contract of carriage.
Main obligations of the seller
- The seller has to carry out all the duties under the terms of delivery specified in the contract. This means delivery of the goods along with a commercial invoice in conformity with the contract of sale and other related documents.
- The seller is responsible for unloading goods from arriving means of transport, and then delivering by placing them at the disposal of the buyer at the point agreed in the contract.
- He connects the carriage of the goods.
- He provides the buyer, at his own expense, with all documents necessary to enable the buyer to take over the goods.
- He assists the buyer at the buyer request, risk and cost in obtaining any documents necessary for transit and import clearance formalities.
- The seller packs and marks the goods.
- He informs the buyer about matters related to receiving the goods.
- He unloads goods at the place of delivery.
The buyer bears costs
- The costs of import formalities: customs, taxes, import permits, import security clearance and costs of obtaining all official permits;
- Any additional costs if the buyer fails to fulfill its obligations stated in the contract;
- The costs needed to obtain documents related to import clearance.
Obligations of the buyer
- The buyer assists the seller, at his request, risk and cost, in obtaining any documents necessary for the export and transit clearance formalities.
- He has to carry out and pay for import clearance.
- He informs the seller in advance of all safety requirements related to transport, ship name, loading point and possible delivery date within the period agreed in the contract.
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