DPU (Delivered at Place Unloaded)

What Is the Incoterm DPU (Delivered at Place Unloaded)?

DPU is an incoterm for international transport that requires the seller to deliver the goods to a named destination. It is the only incoterm where the seller is responsible for unloading the goods at the destination point.

Both the buyer and seller should clarify a point of delivery to ensure seamless execution.

Key characteristics of DPU

Here are the core features of the DPU incoterm:

Seller’s responsibilities

DPU requires the seller to shoulder most of the transport responsibility. This includes export packaging and marking and obtaining export licenses. The seller must clear the goods for export, provide all the necessary documentation, and prepare the commercial invoice. They also have to arrange for the pre-carriage and main delivery, bearing the loading charges. However, they are not obligated to provide insurance under DPU.

After delivery to the destination country, the seller has to arrange for transportation to a named destination and cover unloading costs. Sellers must also provide proof of delivery and cover export pre-shipment inspection charges.

Buyer’s responsibilities

The buyer bears minimal responsibility under DPU. The buyer must pay for the goods as stated in the agreement. While the seller arranges and pays for the main carriage, the buyer must cover all import duties and formalities, including pre-shipment inspection charges for import clearance. If the named destination point is not the final delivery location, the buyer has to arrange and pay for further carriage.

Point of risk and cost transfer

The seller covers all risk until the goods have been unloaded at the agreed-upon location in the destination country. The buyer assumes the risk afterward until the final delivery point. The costs are transferred to the buyer at this point as well. However, the seller is not obligated to cover any import duties or tax fees.

Advantages of DPU

For the seller

Clear delineation of responsibility to the point of unloading at the agreed-upon destination
Simplified logistics with greater control over the majority of the transport
Potential cost savings with freedom to choose suitable carriers
Easy payment verification as the seller bears responsibility for the goods until the agreed-upon point
No obligation to provide insurance

For the buyer

Enhanced convenience as the seller has to make a majority of the transport arrangements
No responsibility for the goods until they are unloaded at the delivery point
Improved financial planning with no liability for transport or unloading costs
Simplified collection process with a clear point of delivery

Disadvantages of DPU

Challenges for the seller

Potentially complex logistics requiring detailed planning and risk assessment
Increased liability for damage or loss as sellers assume responsibility for the goods until unloading
Handling all export customs formalities, including documentation, duties, and tax

Challenges for the buyer

Limited control over transport logistics, potentially leading to inflated costs
Handling all import customs formalities, including documentation, duties, and tax
Added complexity in terms of coordinating the unloading process, raising safety concerns

When to use DPU

The DPU incoterm can be used for all modes of transportation. It is suitable for use in multimodal deliveries where sellers wish to streamline logistics and minimize buyer involvement in transportation arrangements.

Buyers can choose this incoterm when they prefer a clear cost structure and convenience relating to receiving goods at the destination. Moreover, when the buyer has limited experience in or resources for logistics, DPU can prove beneficial.

FAQs

What is the difference between DAP and DPU?

Both DPU and DAP (Delivered At Place) require sellers to deliver goods to a named destination point. However, under DAP, the seller’s liability ends after the goods are made available at that point. Unlike DPU, DAP does not require the seller to unload the goods.