7 Delivery Agreements for any mode of transport – INCOTERMS 2020

 INCOTERMS (Delivery Term Agreements):

The difference in rules between countries creates a need to organize the interpretations. So the ICC (International Chamber of Commerce) started a series of pre-defined commercial series of three-letter trade terms related to common contractual sales practices. Incoterms inform sales contracts defining respective obligations, costs, and risks involved in the delivery of goods from the seller to the buyer.

The first work published by the ICC (The International Chamber of Commerce) on international trade terms was issued in 1923, with the first edition known as Incoterms published in 1936. The Incoterms rules amended many times based on the latest raised trade confusion. See the latest INCOTERM 2020:

Rules for any mode of transport:

 

  • EWX: Ex Work

The seller is only responsible for making the goods available at the designated location with properly packed. It is the buyer’s responsibility to clear the goods for export and arrange the pickup, transport, shipping, insurance, clearance, and delivery. In a simple way Buyer’s responsibility from A-Z.

 

  • FCA: Free Carrier

The seller is responsible for export clearance and delivery of goods to the carrier at the named place of delivery. The seller is only responsible for loading the goods if the seller’s place of business is the named place of delivery. A carrier is any person or company that undertakes the carriage, such as a shipping line, airline, trucking company, railway, or freight forwarder. It is the Buyer’s responsibility of insurance and clearance at the destination border.

 

  • CPT: Carriage Paid To

The seller delivers the goods to a carrier at an agreed point. A freight forwarder at which point, the risk transfers pick up the seller’s responsibility until the delivery to the buyer. Insurance risk is released to the buyer upon cargo delivery to the carrier.

 

  • CIP: Carriage and Insurance Paid To as

This means that the seller delivers the goods to a carrier or another approved person (selected by the seller) at an agreed location.

The seller is responsible for paying the freight and insurance charges, which are required to transport the goods to the selected destination. It states that, even though the seller is responsible for freight and insurance, the risk of damage or loss of the transported goods transfers from the seller to the buyer the moment the carrier receives the goods.

  • DAP: Delivered At Place

This incoterm is used for any mode of transport. The seller delivers the goods at a named destination, specified by the buyer, the unloading of the goods is the responsibility of the buyer. The buyer is also required to sort out duties and taxes, as well as clear the goods through customs at the destination point.

 

  • DPU: Delivered at Place Unloaded

The seller is responsible for moving the goods from the origin until their delivery at the disposal place agreed to be unloaded at the destination. The seller bears risk until delivery of goods to the named place. This term can be used for any mode of transportation. The seller must be confident to arrange the unloading of goods at the named place.

 

  • DDP: Delivered Duty Paid

The seller is responsible for all costs associated until the goods are delivered to the buyer, and cleared for import at the named place of the destination. The seller does not pay for unloading the goods. It is important to mention the exact name of the place of the destination. This term can be used for any mode of transportation including multimodal.

 

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He works in the shipping and supply chain field with more than 30 years in shipping line agencies, logistics & and freight forwarding, equipped with bachelor’s degree in Maritime Transport “Marine Economics & Management”. Offering excellent managerial with focusing eye skills to deliver outstanding results for the highest level of organizations.

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Issa Al Fraij

He works in the shipping and supply chain field with more than 30 years in shipping line agencies, logistics & and freight forwarding, equipped with bachelor’s degree in Maritime Transport “Marine Economics & Management”. Offering excellent managerial with focusing eye skills to deliver outstanding results for the highest level of organizations.

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