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Delivered at Frontier (DAF)

When the seller takes responsibility for the costs of shipping the product to the drop-off point

What is Delivered at Frontier (DAF)?

Delivered at frontier (DAF) is a term used in international shipping contracts when the seller is required to deliver goods to a border location. It is the responsibility of the seller to cover all the costs associated with transporting the goods until the drop-off point for the buyer. Hence, the party that picks up the goods at the border will be responsible for importing the goods across customs.

 

Delivered at Frontier (DAF)

 

Summary

  • Delivered at frontier (DAF) is when the seller takes responsibility for the costs of shipping the product to the drop-off point. It is an important term in international shipping contracts and is legally binding.
  • The term “delivered at frontier” was first developed by the ICC in 1967. However, in 2010, the term was replaced by the terms delivered at terminal (DAT) and delivered at place (DAP).
  • The main goal of delivered at frontier is to include all the shipping details, the drop-off point, and all parties included in the transaction. This is completed to reduce the complexity and confusion involved in international shipping.

 

Understanding Delivered at Frontier

Delivered at frontier (DAF) is a term highly used in shipping contracts to ship goods across borders. The word frontier is a path on the shipping route that is highly trafficked and involves freight inspection. Hence, shipping agreements are an integral part of the transfer of goods from the buyer to the seller.

Due to the presence of custom controls, international shipping is more complex and complicated than domestic shipping. In order to facilitate a smooth transfer of goods from the seller to the buyer, a legally binding contract is created that includes a variety of instructions and appropriate liabilities to avoid confusion.

If a shipping contract includes a delivered at frontier drop-off clause, the seller is responsible for the cost while the goods are in their possession. The delivered at frontier clause will clearly mention the location for drop off and the parties meeting the seller.

Frontier border drop-offs are important locations for international trade, as they are drop-off points for land and sea trade. Seaport drop-offs are when goods are transported via sea to land, and land drop-offs include the use of land transports like railway, trucks, or freight to transport goods.

A seller exporting a good is responsible for all the export costs and must comply with export laws such as export filings and licensing. From the border, it is the responsibility of the buyer to pay all the costs and process the papers needed to clear the goods through customs. They include custom filings, inspection, and any import tariffs/costs.

 

Delivered at Frontier - How It Works

 

The International Chamber of Commerce (ICC)

Established in 1919, the International Chamber of Commerce (ICC) aims to standardize shipping language globally. Intercom rules were developed and published by the ICC after a survey was undertaken where merchants from across the globe were asked about the commercial trade terms used by them. Since the completion of the survey, importers and exporters from across the globe rely on the publication to understand shipping lingo.

The term “delivered at frontier” was invented by the ICC in 1967, and it was widely used decades ago. However, recently, fewer importers and exporters are using the term, with cross-border transactions becoming less complex over the years.

Hence, in 2010, the International Chamber of Commerce removed the word from their lexicon. In 2011, the ICC changed the name from delivered at frontier to delivered at place (DAP) and delivered at terminal (DAT). DAP is when the seller bears all the cost and any potential loss experienced from transporting the goods to a specific location. DAT is when sellers unload the goods from the transportation used to import or export the product and transfer the goods to the destination of the buyer’s choice.

The terms DAP and DAT are interchangeable and generally come with the same requirements. In conclusion, a border drop-off point can be called terminal, frontier, or place. It is important to include the shipping details, drop-off point, and the parties included in the transactions.

 

Additional Resources

CFI is the official provider of the global Certified Banking & Credit Analyst (CBCA)™ certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, the additional resources below will be useful:

  • Bill of Lading
  • Freight on Board (FOB)
  • Globalization
  • Voyage Policy

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