DAT (Delivered At Terminal): Incoterm Meaning & Shipping Pricing

What is DAT (Delivered At Terminal)?

DAT, or Delivered At Terminal, is one of the Incoterms defined by the International Chamber of Commerce (ICC). It indicates that the seller is responsible for delivering the goods to a specified terminal, which can be a port, warehouse, or other logistics facility. Under DAT, the seller bears all risks and costs associated with transporting the goods to the terminal, unloading them, and ensuring they are ready for the buyer to take possession.

Key Features of DAT

1. Delivery Point: The seller must deliver the goods at the terminal agreed upon in the sales contract.
2. Unloading Responsibility: The seller is responsible for unloading the goods at the terminal.
3. Transfer of Risk: Risk transfers from the seller to the buyer once the goods are unloaded and available for the buyer.
4. Applicable Modes of Transport: DAT can be used for any mode of transport, including sea, air, rail, and road.

Seller’s Responsibilities

• Transport Costs: The seller covers all costs related to transporting the goods to the terminal, including freight charges.
• Insurance: While not mandatory, the seller may choose to insure the goods during transit.
• Customs Clearance: The seller is responsible for export customs clearance in the origin country.
• Loading and Unloading: The seller must handle all loading and unloading operations at the terminal.

Buyer’s Responsibilities

• Import Customs Clearance: The buyer is responsible for customs clearance and any associated duties or taxes upon arrival.
• Further Transportation: After goods are delivered at the terminal, the buyer must arrange for further transportation to the final destination.

Shipping Pricing Under DAT

When calculating shipping prices under the DAT Incoterm, several factors should be considered:

1. Freight Charges: This includes the cost of transporting goods from the seller’s location to the designated terminal.
2. Terminal Handling Charges: Fees charged by the terminal for unloading and handling the goods.
3. Insurance: Optional, but sellers might add insurance costs for protecting goods during transport.
4. Customs Fees: Export customs clearance costs incurred by the seller before goods leave the origin country.
5. Additional Charges: Any extra fees that may apply based on the specific requirements of the shipment.

Example Scenario

Scenario: A company in China sells machinery to a buyer in Germany using DAT.

• Seller’s Responsibilities:
  • Arrange transport of machinery from their facility to Hamburg Terminal.
  • Cover all associated costs, including freight and unloading at the terminal.
  • Complete necessary export customs formalities.
• Buyer’s Responsibilities:
  • Once the machinery is unloaded and available at Hamburg Terminal, the buyer is responsible for import customs clearance and delivery to their facility.

Conclusion

The DAT Incoterm provides a clear framework for the responsibilities of both sellers and buyers in the shipping process. By understanding the meaning and implications of DAT, businesses can make informed decisions regarding pricing and logistics, ensuring smooth and efficient trade operations.