Incoterms Explained: Delivered at Place Unloaded (DPU)
When goods are traded under the Delivered at Place Unloaded (DPU) incoterm, the seller is responsible for delivering the goods to a specific, named location, and is responsible for risk until they are unloaded. The destination can be any location, such as a terminal, warehouse, or otherwise named place. The buyer is responsible for the import customs clearance, duties, and anything after the goods have been unloaded are unloaded at the named place – such as storage.
The DPU incoterm is the only incoterm in which the seller is responsible for both delivering and unloading the goods within the country of destination.
We explore the risks and responsibilities of the DPU incoterm in this article.
The Associated Risks & Costs of Using the DPU Incoterm
Risks and Costs for the Seller
The seller is responsible for arranging and paying for the transportation from the seller’s premises right up until the goods have been unloaded at their destination – at which point the risk transfers to the buyer. Additionally, the seller is responsible for the export customs documentation, export licences, and any other export formalities.
Risks and Costs for the Buyer
The buyer becomes responsible for the goods once they have been unloaded at the agreed delivery point, at which point they become liable for any additional charges such as storage or onward distribution. The buyer is also responsible for import customs clearance and import duty.
Potential Issues of Using the DPU Incoterm
Potential Issues for the Seller
The seller is responsible for the loss or damage of the shipment throughout the whole journey, with risk transferring once the goods are unloaded at the named place.
Therefore, any costs resulting from a diversion of a vessel, a delay in customs clearance for an inspection, or damages in transit are their responsibility.
Potential Issues for the Buyer
The buyer must arrange import customs clearance and pay any duty and VAT, ensuring that all relevant customs procedures are completed in a timely manner.
As the seller is responsible for arranging the logistics and unloading of the goods, the buyer has little control over the carrier used, the transportation route, or the timing of the shipment – which could be problematic if there are delays or service issues.
For example, if the seller’s agent does not provide the movement documents in good time, the customs clearance could be delayed.
Additionally, the buyer has no visibility on the costs and could end up paying more than if they were to arrange the shipment themselves.
Although the seller is responsible for unloading the goods, any charges incurred due to issues with access or operational delays at the end destination may result in discrepancies between the buyer and seller.
Use of the Delivered at Place Unloaded Incoterm
DPU is a valid incoterm for any mode of transport.
DPU Under Incoterms 2020
Under Incoterms 2020, the Delivered at Place Unloaded (DPU) Incoterm both replaced and expanded on the Delivery at Terminal (DAT) Incoterm from Incoterms 2010.
The delivery location where the goods are unloaded must be specifically named and agreed upon by both the buyer and seller before the goods are shipped.
The seller carries both the cost and risk of the goods until they have been unloaded at the delivery location, at which point they transfer to the buyer, who is also responsible for the import customs clearance and duties.
Delivered at Place Unloaded (DPU) Incoterm – a Summary
- The seller is responsible for the shipment until it’s unloaded at the destination.
- The risk transfers to the buyer once the goods have been unloaded.
- The goods are unloaded at a pre-agreed, named place.
- The seller arranges all the export formalities, transportation and unloading.
- The buyer is responsible for import customs clearance and taxes.
- The buyer is responsible for subsequent charges or issues after unloading.
Do you need help understanding or selecting your incoterms? Our experts at CSG are here to help you gain clarity on your risks and responsibilities so that you can make the right choice for your business.
