DPU Incoterm | DPU Delivery Term | Delivered at place unloaded

Delivered at place unloaded (DPU) is the new incoterm introduced by International chamber of commerce (ICC).

Delivered at terminal (DAT) was discontinued by ICC and it was replaced by DPU in Incoterms® 2020.

Under DPU cost, risk and responsibility remains with seller until the goods are delivered and unloaded at named place. Buyer's responsibility is to clear (custom) the goods at destination and to pay the custom duty.

DPU is applicable for any mode of transportation; it is also applicable for the shipments which have more than one mode of transportation that is called as multimodal transportation.

Cost:
Seller pays the cost of warehousing, packing, loading, primary transportation at origin, export custom clearance, export duty if any, ocean freight, transportation at destination (based on named place) and unloading at named place.
Buyer pays the cost of import custom clearance, import duties and transportation at destination (based on named place).

Risk:
Risk in DPU remains with seller until goods are unloaded at named place.

Insurance:
Seller arranges insurance in case of DPU.

Example:
Let us understand DPU incoterm in detail with an example.
Let us assume one exporter of granites in Bangalore, India approached a buyer of granites in Casablanca, Morocco who has a showroom and warehouse in the city of Casablanca named "Heavy stones". Buyer needs polished granite slabs of good quality, both buyer and seller starts further discussion on the trade.

Negotiation:
Buyer wants granite slabs to be delivered at their warehouse in Casablanca, seller in Bangalore has good hold in shipping industry so they decide to go ahead with DPU incoterm.
They start negotiation bases on scope of works under DPU and finalize a price per square feet.
They decide to go ahead with LC as buyer and seller are unknown to each other.

Contract:
Once price is decided by both parties, they prepare a contract with DPU incoterm.
Terms of delivery: DPU Heavy stones warehouse, Casablanca.
Terms of payment: Irrevocable letter of credit

Operations:
Seller start cutting, polishing and finishing of  granites blocks. Simultaneously they contact freight forwarder/ liners for container booking and also contact their transporter for vehicles. Ultimately they produce final products which are called as granite slabs. Once finished goods are ready they pack those and call freight forwarder and transporters for placement of vehicles carrying containers at their factory at Bangalore and stuff the finished goods in containers and sends to Bangalore ICD, export custom clearance happens at ICD and the containers are handed over to the carrier with relevant documents, seller approaches insurance agency and take insurance of the cargo for 110% of the invoice value. Containers will be loaded in rail carrier and taken to nearest port which is Chennai port.
Export formalities are completed at Bangalore ICD, hence seller or their agent approaches various offices for collection of post shipment documents. Once containers are arrived at Chennai port, the same will be unloaded at terminal. As per schedule vessel arrives at port and containers are loaded into vessel. Once containers are loaded into vessel and vessel is on-board, liner will issue shipped on board B/L to forwarder or seller.
Seller and it's agent collects all shipping documents (post shipment documents).
All documents should be prepared as per terms and conditions of LC. Drafts of all documents should be checked thoroughly by seller as per LC to avoid discrepancy charges.

Documents:
1. Commercial invoice
2. Packing list
3. Bill of lading
4. Certificate of origin
5. Pre shipment inspection certificate
6. Insurance certificate
7. Other documents if any

Letter of credit (LC) functions: Once all documents are collected, seller submits those along with original LC to advising bank, advising bank present documents to issuing bank, issuing bank makes payment to advising bank, advising bank pays beneficiary that is supplier/seller. Issuing bank sends or hands over original documents to buyer as per the agreement (either after receiving payment or on credit).

Meanwhile buyer contacts their CHA and share scan copies of all shipping documents with them and hands over original documents upon receipt.
Buyer's CHA starts clearance process after arrival of vessel at Casablanca port, Morocco. Port charges and import duty to be paid by buyer/ importer. Goods are moved to named place (Heavy stones warehouse, Casablanca in this case) at seller's cost upon completion of clearance and  receipt of custom clearance documents, seller arranges unloading of goods at Heavy stones warehouse and hand over the goods to buyer, at this point seller's responsibility ends.

This is all about Delivered at place unloaded (DPU) incoterm.

Also check other incoterms:

EXW (Ex Works)

FCA (Free Carrier)

FAS (Free alongside ship)

FOB (Free on Board)

CFR (Cost and Freight)

CIF (Cost Insurance & Freight)

CPT (Carriage paid to)

CIP (Carriage & Insurance paid to)

DDP (Delivered Duty Paid)

DAP (Delivered at Place)