Introduction
In international trade, Delivered at Terminal (DAT Incoterms) was an Incoterm designed to simplify delivery responsibilities between buyers and sellers. Under DAT shipping terms, the seller is responsible for delivering the goods to a named terminal such as a port, airport, or warehouse at the destination country. Once the goods are unloaded at the terminal, risk transfers to the buyer.
However, in the Incoterms 2020 update, DAT was replaced by Delivered at Place Unloaded (DPU) to make the rule clearer and more flexible, as delivery is not limited only to “terminals.” Despite this change, many traders still use the DAT term informally to describe situations where delivery ends upon unloading at a designated point.
In this article, we’ll explain what DAT means, explore seller and buyer obligations, discuss risk transfer and customs handling, and compare DAT (now DPU) with DAP and DDP so you can choose the most suitable delivery term for your international shipping operations.
Explaining the Meaning of DAT and Incoterms
Delivered at Terminal (DAT) is one of the international commercial terms (Incoterms) used in global trade to define seller and buyer responsibilities. Under DAT, the seller delivers the goods to a named terminal—such as a port, airport, or logistics hub—in the destination country. Delivery is considered complete once the goods are unloaded at the terminal, at which point the risk transfers from seller to buyer.
Incoterms, published by the International Chamber of Commerce (ICC), provide standardized rules for international shipping. They clarify who pays for transport, insurance, and duties, as well as when risk and ownership transfer during transit.
By understanding DAT within the framework of Incoterms, businesses can avoid disputes, clearly allocate responsibilities, and plan costs more effectively in international transactions.
Delivered at Terminal (DAT) Incoterm Explained
DAT Meaning in Shipping
Delivered at Terminal (DAT) means the seller delivers the goods once they are unloaded at a named terminal (such as a port, airport, or warehouse) in the destination country. This term was introduced in Incoterms 2010 and later replaced by DPU (Delivered at Place Unloaded) in Incoterms 2020, but its meaning remains similar.
When Delivery Is Complete
Delivery under DAT is complete after the goods are unloaded from the arriving transport at the agreed terminal. From that point, all risks and costs transfer to the buyer.
Seller’s and Buyer’s Roles
The seller handles export clearance, transport, and unloading at the destination terminal. The buyer takes over after unloading, managing import customs, duties, and local delivery to the final destination.
DAT Incoterms 2020: Replacement by DPU
Evolution from DAT to DPU
In Incoterms 2020, the term Delivered at Terminal (DAT) was replaced by Delivered at Place Unloaded (DPU). This change was made to reflect greater flexibility in delivery locations. While DAT limited delivery strictly to a “terminal,” DPU allows delivery at any place, as long as it is unloaded, such as a warehouse, factory, or logistics center.
Key Differences Between DAT and DPU
The main difference is in the delivery location and unloading responsibility.
- Under DAT, the seller delivers goods only at a terminal after unloading.
- Under DPU, the seller can deliver goods to any agreed place, provided they handle the unloading.
This flexibility in DPU makes it more practical for modern logistics, allowing sellers and buyers to choose the most convenient delivery point beyond just ports or terminals.
Seller vs Buyer Responsibilities (DAT Incoterm)
| Responsibility | Seller | Buyer |
|---|---|---|
| Export packaging and documentation | ✅ | ❌ |
| Export customs clearance | ✅ | ❌ |
| Main transport (freight) | ✅ | ❌ |
| Unloading at terminal | ✅ | ❌ |
| Insurance (optional) | ✅ | ❌ |
| Import customs clearance | ❌ | ✅ |
| Import duties and taxes | ❌ | ✅ |
| Inland transport (to final point) | ❌ | ✅ |
Seller’s Responsibilities Under DAT
Under Delivered at Terminal (DAT) Incoterms, the seller bears the main transport responsibilities and costs until the goods are unloaded at the named terminal in the destination country. Below are the seller’s obligations in detail:
1. Export Packaging and Documentation
The seller must properly package and label the goods to ensure safe international transport. Packaging should comply with export standards and any special handling requirements.
In addition, the seller must prepare and provide all essential export documentation, such as:
- Commercial invoice
- Packing list
- Bill of lading (B/L) or Air Waybill (AWB)
- Certificate of origin
- Export licenses or permits (if required)
These documents are crucial for both export clearance and import processing at the destination.
2. Export Customs Clearance
The seller is fully responsible for export formalities in their own country. This includes:
- Preparing export declarations
- Obtaining export permits or licenses
- Paying any applicable export taxes or fees
Only after the goods are cleared for export can the shipment be loaded and transported internationally.
3. Main Transport (Freight Costs)
The seller must arrange and pay for the main transport from their warehouse or factory to the designated terminal in the buyer’s country (for example, a port, airport, or container terminal).
The seller chooses the carrier, route, and mode of transport whether by sea, air, or land and covers all freight charges.
4. Unloading at the Terminal
This is what makes DAT unique. The seller’s responsibility continues until the goods are unloaded from the arriving transport vehicle at the agreed terminal.
Delivery is officially completed once the goods are unloaded and placed at the buyer’s disposal at the terminal (such as a port or airport).
From this point onward, the risk transfers to the buyer.
5. Insurance (Optional)
While insurance is not mandatory under DAT, sellers often arrange insurance coverage for the main carriage to protect the goods from loss or damage during transit.
Once the goods are unloaded, the seller’s risk ends, and further insurance becomes the buyer’s responsibility.
Buyer’s Responsibilities Under DAT
After the seller has unloaded the goods at the terminal, the buyer assumes control and takes on all further responsibilities, including customs clearance, local transport, and import duties.
1. Import Customs Clearance
The buyer must handle all import formalities in their own country, which includes:
- Submitting import documentation
- Obtaining import licenses or permits
- Paying any import clearance fees
The buyer is responsible for ensuring that all regulatory and compliance requirements are met before the goods can enter the local market.
2. Payment of Import Duties and Taxes
All import duties, taxes, and local charges (such as VAT or customs tariffs) are paid by the buyer.
This can include:
- Customs duties
- Value-added tax (VAT)
- Other governmental fees
The seller has no financial obligation for these payments under DAT.
3. Inland Transport to Final Destination
Once the goods are unloaded at the terminal, the buyer must arrange and pay for inland transportation to their final location (such as a warehouse, factory, or store).
The cost and risk of this stage are entirely on the buyer.
4. Insurance After Delivery
After delivery (unloading), the risk and ownership transfer to the buyer. Therefore, if the buyer wants additional coverage for inland transportation or storage, they must arrange their own insurance.
DAT Cost and Price Breakdown
Delivered at Terminal (DAT) shipping involves specific costs that are mostly borne by the seller until the goods are unloaded at the agreed terminal. Understanding these costs is crucial for accurate pricing and comparing DAT with other Incoterms like DAP, DDP, CIF, and FOB.
1. What’s Included in the DAT Price
The DAT price generally covers:
- Export packaging and documentation : Preparing goods for safe international shipment.
- Export customs clearance fees : Handling all export paperwork and permits.
- Main transport (freight) :Shipping goods from the seller’s warehouse to the destination terminal.
- Unloading at the terminal : The seller is responsible for unloading goods at the named terminal.
- Optional insurance : While not mandatory, the seller may arrange insurance during transit.
Not included in DAT price:
- Import duties and taxes (paid by buyer)
- Import customs clearance fees
- Local delivery beyond the terminal
2. DAT vs DAP vs DDP Costs
| Feature | DAT | DAP | DDP |
|---|---|---|---|
| Transport to destination | Seller | Seller | Seller |
| Unloading at destination | Seller | Buyer | Seller |
| Import duties & taxes | Buyer | Buyer | Seller |
| Customs clearance | Export by seller; import by buyer | Export by seller; import by buyer | Export & import by seller |
| Buyer convenience | Moderate | Moderate | High |
- DAT vs DAP: DAT includes unloading at the terminal, making it slightly more costly for the seller but reducing buyer’s effort at the terminal. DAP leaves unloading to the buyer.
- DAT vs DDP: DDP includes all duties, taxes, and local delivery, making it the most expensive for the seller but most convenient for the buyer.
3. How DAT Cost Impacts CIF and FOB Trade Decisions
- CIF (Cost, Insurance, Freight): DAT can be considered similar to CIF Incoterms for sea transport if the seller covers freight and optional insurance up to a terminal, but DAT requires unloading, whereas CIF typically transfers risk at the ship’s rail.
- FOB (Free On Board): Under FOB, the seller’s responsibility ends when goods are loaded onto the vessel, making it cheaper than DAT because the buyer handles freight and unloading.
DAT Delivery and Transport Process
The Delivered at Terminal (DAT) Incoterm involves a structured delivery process where the seller handles most logistics until the goods are unloaded at the destination terminal. Here’s a step-by-step breakdown:
Step 1: Preparing the Goods
The seller packages and labels the goods according to export and transport requirements.
Required documentation, such as commercial invoice, packing list, and export licenses, is prepared.
Step 2: Export Customs Clearance
The seller completes all export formalities in the origin country.
This includes submitting customs declarations, paying any export duties, and obtaining clearance to ship.
Step 3: Freight Booking and Transport Arrangement
The seller books the main transport (sea, air, or land) to the named terminal in the buyer’s country.
Freight charges are paid by the seller.
Optional cargo insurance may be arranged for transit protection.
Step 4: Main Transport
Goods are transported from the seller’s warehouse or facility to the destination terminal.
The seller monitors the shipment to ensure timely delivery.
Step 5: Unloading at Terminal
Upon arrival at the agreed terminal, the seller is responsible for unloading the goods.
Delivery is considered complete once unloading is finished, and the risk transfers to the buyer.
Step 6: Handover to Buyer
The buyer takes possession of the goods at the terminal.
The buyer is responsible for import customs clearance, payment of duties and taxes, and inland transport to the final destination.
Risk and Insurance in DAT Shipping Terms
Understanding risk transfer and insurance is crucial in Delivered at Terminal (DAT) shipments, as it determines who bears liability for loss or damage during transport.
1. Risk Transfer in DAT
Under DAT, the seller bears all risk of loss or damage until the goods are unloaded at the agreed terminal.
Once unloading is complete, risk transfers to the buyer, even if the goods have not yet reached their final destination.
This is a key distinction from terms like DAP, where unloading is the buyer’s responsibility, and risk transfers before unloading.
2. Insurance Under DAT (CIF-Style Coverage)
DAT does not require the seller to purchase insurance, unlike CIF (Cost, Insurance, Freight), where the seller must insure the goods.
However, sellers often arrange optional insurance during transit to protect the goods from loss or damage while in their care.
If the seller arranges insurance, it typically covers the period up to delivery at the terminal, similar to CIF insurance coverage.
3. Practical Insurance Responsibilities
Seller: Responsible for insuring the goods if they choose to. Ensures protection until unloading at the terminal.
Buyer: Responsible for any insurance after unloading, including risks during import clearance or inland transport to the final destination.
Example:
If a shipment of electronics is damaged during sea transport under DAT, the seller’s insurance (if purchased) covers the loss until unloading at the terminal. After unloading, any further damage is the buyer’s responsibility.
Advantages and Disadvantages of DAT (Delivered at Terminal)
| Aspect | Advantages | Disadvantages |
|---|---|---|
| Seller Control | Seller manages packaging, freight, and unloading at the terminal | — |
| Buyer Clarity | Clear delivery point for planning import clearance and final transport | — |
| Risk During Transit | Reduced risk for buyer until goods are unloaded | — |
| Delivery Flexibility | — | Limited flexibility; delivery must be to a specific terminal |
| Post-Unloading Responsibility | — | Buyer handles import customs, duties, taxes, and inland transport |
| Insurance | Optional insurance may be arranged by seller | If not insured by seller, goods may be unprotected during transit |
DAT vs DAP vs DDP Comparison
| Feature | DAT | DAP | DDP |
|---|---|---|---|
| Delivery Point | Goods unloaded at agreed terminal | Goods delivered to place, buyer unloads | Goods delivered to place, seller pays duties |
| Transport Cost | Seller pays until terminal | Seller pays until place | Seller pays until place, including duties |
| Customs Duties & Taxes | Buyer pays import duties | Buyer pays import duties | Seller pays import duties |
| Risk Transfer | After unloading at terminal | Upon delivery to place (before unloading) | Upon delivery to place (after duties included) |
Delivered at Terminal (DAT), Delivered at Place (DAP), and Delivered Duty Paid (DDP Incoterms ) are three commonly used Incoterms that define seller and buyer responsibilities, costs, and risk transfer points in international trade. Understanding their differences helps businesses choose the most suitable shipping terms for their operations.
1. Delivery Point
- DAT: Delivery occurs when the goods are unloaded at the agreed terminal (port, airport, or logistics hub). This is the key feature that distinguishes DAT from DAP.
- DAP: The seller delivers goods to a specified place, but the buyer is responsible for unloading.
- DDP: The seller delivers goods to the agreed place and pays all import duties and taxes, giving the buyer the highest convenience.
2. Transport Cost
- DAT: The seller covers all transportation costs up to unloading at the terminal.
- DAP: The seller covers costs up to the agreed place, excluding import duties.
- DDP: The seller pays for all costs, including transport, import duties, and taxes, until the final delivery point.
3. Customs Duties and Taxes
- DAT: The buyer is responsible for import duties, taxes, and customs clearance.
- DAP: The buyer still handles import duties and customs clearance.
- DDP: The seller assumes responsibility for all import duties, taxes, and customs formalities.
4. Risk Transfer
- DAT: Risk passes from seller to buyer after unloading at the terminal.
- DAP: Risk transfers when the goods arrive at the agreed place, before unloading.
- DDP: Risk transfers when the goods are delivered to the buyer at the agreed place, duties paid.
Practical Example of DAT Shipment
Let’s consider a real-world example to illustrate how Delivered at Terminal (DAT) works in practice:
Scenario:
A UK company orders industrial machinery from a supplier in China. The parties agree to use DAT Incoterms with the delivery terminal being the Port of London.
Step 1: Seller Responsibilities
Export Packaging & Documentation
- The Chinese supplier packages the machinery securely for international shipping.
- Documents such as the commercial invoice, packing list, and export declaration are prepared.
Export Customs Clearance
- The supplier completes all export formalities in China and pays any applicable export duties or fees.
Freight and Transport to Terminal
- The supplier arranges and pays for sea freight from Shanghai to the Port of London.
- Optional cargo insurance may be purchased by the seller to protect against loss or damage during transit.
Unloading at Terminal
- Upon arrival at the Port of London, the supplier is responsible for unloading the machinery from the ship.
- Delivery is considered complete after unloading, and risk transfers to the UK buyer at this point.
Step 2: Buyer Responsibilities
Import Customs Clearance
The UK buyer handles customs formalities, submits import documentation, and arranges inspection if required.
Payment of Duties and Taxes
The buyer pays import duties, VAT, and any other applicable taxes.
Inland Transport to Final Location
The buyer arranges and pays for transport from the port to their warehouse or factory.
Further insurance for inland transit is the buyer’s responsibility.
Step 3: Cost and Responsibility Division
| Cost/Responsibility | Seller (China) | Buyer (UK) |
|---|---|---|
| Export packaging & documentation | ✅ | ❌ |
| Export customs clearance | ✅ | ❌ |
| Freight to destination terminal | ✅ | ❌ |
| Unloading at terminal | ✅ | ❌ |
| Insurance during transit (optional) | ✅ | ❌ |
| Import customs clearance | ❌ | ✅ |
| Import duties & taxes | ❌ | ✅ |
| Inland transport to final location | ❌ | ✅ |
| Risk transfer point | At unloading | After unloading |
Final Review
Understanding DAT Incoterms empowers both sellers and buyers to clearly define responsibilities, manage risks, and avoid costly misunderstandings in international trade. By knowing exactly who handles transport, unloading, and customs duties, businesses can make informed decisions, streamline logistics, and ensure smooth, predictable deliveries every time.
FAQ DAT Incoterms
Q1: What is Delivered at Terminal in shipping?
A: DAT means the seller delivers goods and unloads them at the agreed terminal, after which risk transfers to the buyer.
Q2: Who pays for freight under DAT Incoterm?
A: The seller pays all transport costs to the destination terminal, including unloading.
Q3: What replaced DAT in Incoterms 2020?
A: DAT was replaced by DPU (Delivered at Place Unloaded) to clarify that delivery can occur at any place, not just a terminal.
Q4: Does the seller unload goods in DAT?
A: Yes, the seller is responsible for unloading goods at the agreed terminal under DAT terms.
Q5: What are the main differences between DAT and DAP?
A: Under DAT, the seller unloads at the terminal; under DAP, the buyer handles unloading at the agreed place.
