Several modes of delivery commonly used in foreign trade transactions (Part Two)

Release time 2020-05-20 16:13:50 28 times viewed
In foreign trade export transactions, different modes of delivery are involved. In the Incoterms 2000, 13 trade terms in international trade are explained in a unified manner, including location of delivery, division of responsibilities, risk transfer, application of modes of transport, etc. Let's take a look at several common modes of delivery in foreign trade transactions (Part Two)!



Freight payable to (CPT)
The full English name is "Carriage Paid to): tid to (... named place of destination)", i.e. "Shipping to (...specified destination)”.

Division of responsibilities: 
1. The seller deals with export clearance procedures, and pays the goods shipped to the designated destination of freight. 
2. From the time the goods have been delivered to the carrier's care, the risk of loss or damage of the goods and any additional costs arising from the events that occurred after the goods were delivered to the carrier shall be transferred from the seller to the buyer.

Note: 
This term applies to a variety of modes of transport, including multimodal transport. "Carrier" means any person, in a contract of carriage, undertakes to carry out the carriage by rail, road, air, sea, inland river or by other person. If the goods are also transported to the agreed destination using the carrier of the pick-up, the risk is transferred from the time the goods are handed over to the first carrier.

Freight and insurance paid to (CIP)
The full English name is "Carriage and Insurance Paid to( … named place of destination)", i.e. "freight and insurance to (...destination specified). "

Division of responsibilities:
The seller shall pay the freight to (...destination specified). In addition to the same obligation under the CPT terms, the seller shall carry Marine insurance and pay the premium for the risk of loss or damage of the goods to be borne by the buyer in transit. During the period, the seller must pay the freight to deliver the goods to the destination, and the buyer shall bear all risks and additional costs incurred by the seller after delivery.

Note:
This term applies to any mode of transport.

Border Delivery (DAF)
The full English name is "Delivered at Frontier (…named place)", i.e. "the border delivery (... designated location)”.

Division of responsibilities:
When the seller transports the prepared goods to the designated place at the border, before the customs clearance of the adjacent country, the goods that are still in transit will be handed over to the buyer for disposal, and the goods have been cleared for export but have not yet been cleared for import.

Note:
This term applies primarily to goods transported by rail or road, and may also be used for other modes of transport. The term "border" can be used at any border, including the border of the exporting country. It is therefore extremely important to define the border accurately by the designated location and the specific point of delivery.

Port of Destination Ship Delivery (DES)
The full English name is "Delivered Ex Ship" (... named port of destination)", i.e. "delivery on board the port of destination (...designated port of destination)”.

Division of responsibilities:
The seller is responsible for leasing the means of transport and, within the specified time, delivers the cleared goods to the designated port of destination and shall bear all costs and risks, including the shipment of the goods to the designated port of destination.

Note: 
This term applies only to sea or inland transport. If the parties wish the seller to bear the risks and costs of unloading, the DEQ term should be used. DES trade terms may only be used if the goods are unloaded on board a ship at the port of destination by sea or inland or multimodal transport.

Port of Destination Terminal Delivery (DEQ)
The full English name is "Delivered Ex Quay (Duty Paid) (…named port of destination)”, i.e. "Port of destination terminal delivery (tariff paid) (... designated port of destination)”.

Division of responsibilities:
The seller fulfills its obligation to deliver its prepared goods to the buyer at the dock at the designated port of destination. And the seller is responsible for all risks and costs, including fees incurred in customs clearance, taxes and other deliveries.

Note:
This term applies to sea or inland transport. In view of the fact that the world's use of DEQ terminology is not entirely uniform when it comes to who is responsible for import procedures, attention must be paid to the use of DEQ terminology.

Untaxed Delivery (DDU)
The full English name is "Delivered Duty Unpaid(…named place of destination)", i.e. "untaxeddelivery (... specified destination).

Division of responsibilities:
1. The goods to be prepared by the seller shall be delivered at the designated place of the importing country and shall bear all costs and risks (excluding customs duties, taxes and other official fees payable at the time of import) and shall bear the costs and risks of customs clearance.
2. The buyer shall bear the additional costs and risks arising from the failure to handle the import customs clearance of the goods in a timely manner.

Note:
This term applies to all modes of transport. It is generally recommended that the seller should not use the DDU in order to avoid the impact of the transaction due to the buyer's failure to handle the import clearance in a timely manner in the conduct of transactions with countries where it is difficult and time-consuming to process import clearance.

After-tax Delivery (DDP)
The full English name is "Delivered Duty Paid( ... named place of destination)", i.e. "after duty delivery (... specified destination)”.

Division of responsibilities:
The seller, at the designated destination, has completed the import clearance procedures and will deliver the goods that have not been unloaded on the means of delivery to the buyer and complete the delivery. The seller must bear all risks and costs for the shipment of the goods to the designated destination, including any "taxes" payable at the destination (including liability and risk of customs clearance, as well as the payment of fees, duties, taxes and other charges) when customs formalities are required. The seller is the least responsible under EXW terms, while the seller is the most responsible under the DDP term.

Note: 
The term applies to all modes of transport, but DES or DEQ terms should be used when goods are delivered on board or terminal at the port of destination. The seller is most responsible under DDP terminology. This term should not be used if the seller is unable to obtain an import license directly or indirectly. However, if the parties wish to exclude from the seller's obligations all costs (e.g. value added tax) at the time of any import, they should be clearly stated in the contract of sale. If the parties wish the buyer to bear the risks and costs of imports, the term DDU should be used.