The Delivered at Place Unloaded (DPU) Incoterm is an international shipping term that defines who is responsible for which parts of the shipping process and what costs each party must pay.
It is one of 11 Incoterms, which are internationally accepted definitions and rules in international commercial transactions. Understanding the DPU Incoterm can help you make better-informed business decisions regarding international shipping and ensure that all parties involved understand their obligations.
Let’s take a closer look at what this incoterm means and how it applies to exporter and importer obligations, the point of risk transfer, and the benefits and drawbacks for each party.
By the end of this post, you should have a good understanding of whether or not DPU is the right choice for your business.
What Is Delivered at Place Unloaded (DPU)?
Delivered at Place Unloaded (DPU) is an Incoterm that defines who is responsible for the delivery of goods to a specified destination.
Under this agreement, the exporter is responsible for delivering cargo to a named destination and unloading it at an agreed-upon place, as well as all costs until the deliver at the named destination. The importer then assumes responsibility for all costs once the shipment has been delivered and unloaded.
DPU Price Calculation: Product cost + packaging + loading charges + delivery to port/place + export customs charges + terminal charges + loading on carriage + carriage charges +insurance (if its seller side) + destination terminal charges + delivery to destination + profit share
Obligations Under the DPU Incoterm
- Packaging and loading charges
- Carriage charges
- Export customs formalities, duties, and charges
- Origin and destination terminal handling charges
- Payment for goods as specified in the sales contract
- Import customs formalities, duties, and taxes
DPU Point of Risk Transfer
The risk of loss or damage to the goods is transferred from the seller to the buyer when the goods are unloaded at their destination.
In other words, it is the buyer's responsibility to ensure that they are properly received and in good condition upon delivery.
Let’s say you are exporting a shipment of goods from Shanghai, China, to Los Angeles, USA. Under the DPU Incoterm, you, as the exporter, would be responsible for loading and delivering the goods to the port of Los Angeles and unloading them at their destination.
As the exporter, you are also responsible for port charges and organizing the inland transport to deliver the goods to the named place of delivery.
The importer would then assume responsibility for the goods and be liable for any additional costs, such as customs duties and import taxes.
Benefits and Drawbacks of DPU
For exporters, one of the main benefits of using DPU is that they do not have to worry about arranging customs clearance or other formalities in the buyer’s country. This reduces their administrative burden and allows them to focus on other aspects of their business. Additionally, DPU is the ideal solution for streamlining inventory follow since it gives the buyer more authority over the shipping process.
However, since they are responsible for all transportation costs until delivery, they must be careful not to underestimate them when setting prices or negotiating customer contracts. Furthermore, sellers must also ensure they can provide proof of delivery to their buyers should there be a dispute.
For importers, the main benefit of using DPU is that they do not have to arrange for export customs clearance or deal with any additional transportation costs once the goods are delivered. Since all risks and costs associated with unloading or customs clearance are transferred onto them upon arrival, they can rest assured knowing that their goods will be safe until they arrive at their final destination.
Despite this convenience, buyers may be met with a considerable obstacle when it comes to unforeseen taxes or duties upon the arrival of their shipment.
Is DPU the Right Choice for Your Business?
Ultimately, whether or not DPU is the right choice for your business depends on various factors.
As an exporter, you must consider how much risk and cost you are willing to assume until delivery at the destination. Conversely, as an importer, it’s important to understand what fees may be associated with unloading goods upon arrival to ensure that no surprises arise.
You can decide which option will best meet your needs by understanding all aspects of this Incoterm — its obligations, benefits, drawbacks, and more.
With careful consideration given to these details before signing any contracts or agreements with customers abroad, you'll have greater confidence in making the DPU incoterm work for both parties involved.
If you want to leverage the DPU Incoterm for your business, we are here to provide guidance. Don't miss out on this opportunity, and take advantage of our expertise today.
What is the difference between DAP and DPU?
The main difference between Delivered At Place (DAP) and Delivered at Place Unloaded (DPU) is that under the DAP Incoterm, the seller must bear the cost of unloading the shipment, while in DPU, the buyer must bear this cost.
Is DPU the same as DDU?
Delivered at Place Unloaded (DPU) replaced Delivered Duty Unpaid (DDU) in January 2020. The main difference between the two is that under DDU, the buyer was responsible for customs clearance and duties, but this responsibility has now shifted to the exporter under DPU.
Who pays for freight in DPU?
The seller is responsible for the costs of pre-carriage, main carriage, and delivery of goods to the agreed destination.