How well do you know your Incoterms?

Think you have a fairly good grasp on your Incoterms? I thought I did until I took the “challenge” from www.tradefacil.com.

You can take the challenge here (registration required).

Drop us a line and let us know how you did.

Incoterms: DDP – Delivered Duty Paid

DDP

DDP – Delivered Duty Paid – is another useful incoterm that can be used with any mode of transport.
It is very similar to DDU except that with DDP the seller is also responsible for all import customs formalities and duty and for final delivery of the goods to the buyer at the named place of destination. Basically, with DDP, the buyer carries no risk or responsiblity for the goods until they have been made available to him at the named place of destination, which is normally the buyer’s/importer’s premises.

Seller’s responsibilities:
1) Produces the goods and commercial documents as required by the sales contract.
2) Arranges for export clearance and all export formalities.
3) Arranges and pays for all costs for the transportation of the goods, including final delivery, up to named place of destination.
4) Assumes all risk to the goods (loss or damage) up to the point they have been made available to the buyer at the named place of destination. SPECIAL NOTE: Under DDU terms the seller is under no obligation to provide insurance. However, he may have a vested interest in the goods during the voyage. It may be a wise decision to purchase additional insurance coverage in the case of a loss.
5) Seller must advise the buyer that the goods have been delivered to the carrier and the appropriate arrival information. Also should advise buyer when delivery will be made.
6) Seller must make all arrangements for import customs formalities and payment of customs duty.

Buyer’s Responsibilities:
1) Buyer must pay for the goods as per the sales contract
2) Buyer must provide seller with all licenses and authorizations required for import clearance and formalities.
3) Buyer takes delivery of the goods after they have been delivered by the seller to the named place of destination.
4) Buyer must assume all risks for the goods from the time the goods have been made available at the named place of destination.
5) Buyer pays only costs applicable after the goods have been delivered by the seller to the named place of destination.
6) Buyer would accept the seller’s transport documents provided they conform with the sales contract and will allow the buyer to take possession of the goods after delivery to the named place of destination.

This interpretation is provided as a guide only.

Incoterms are published by the International Chamber of Commerce and are available on their website and official publication “Incoterms 2000″. For a complete and official overview please refer to the ICC’s publication.

Incoterms: DDU – Delivery Duty Unpaid

DDU – Delivery Duty Unpaid – Is a fairly common incoterm and can be used for any mode of transport. Under DDU terms the seller is responsible for making the goods available to the buyer at a named place of destination but not cleared for import. The seller is also responsible for all the costs involved to deliver the goods to the named place of destination. The seller’s risk also does not end until it reaches the names place of destination.

A common misconception with DDU is that the seller is also responsible for the inland transport of the goods to their final destination after the buyer has arranged for import clearance. This is incorrect. The buyer assumes all risk and responsibility for the import clearance, duties, and delivery to final destination.

Under DDU terms the seller’s risk and responsiblity end once the goods have been made available to the buyer at the named place of destination. The seller is also responsible for all costs up to the named place of destination, but is not responsible for delivering the goods to their final destination.

Seller’s responsibilities:
1) Produces the goods and commercial documents as required by the sales contract.
2) Arranges for export clearance and all export formalities.
3) Arranges and pays for all costs for the transportation of the goods up to named place of destination.
4) Assumes all risk to the goods (loss or damage) up to the point they have been made available to the buyer at the named place of destination. SPECIAL NOTE: Under DDU terms the seller is under no obligation to provide insurance. However, he may have a vested interest in the goods during the voyage. It may be a wise decision to purchase additional insurance coverage in the case of a loss.
5) Seller must advise the buyer that the goods have been delivered to the carrier and the appropriate arrival information.
6) Seller has to provide the buyer with transport documents that will allow the buyer to take possession of the goods at the named place of destination.

Buyer’s Responsibilities:
1) Buyer must pay for the goods as per the sales contract
2) Buyer must obtain all commercial documentation, licenses, and authorizations required for import and arrange for import clearance and formalities at own risk and cost.
3) Buyer takes delivery of the goods after they have been delivered by the seller to the named place of destination.
4) Buyer must assume all risks for the goods from the time the goods have been made available at the named place of destination.
5) Buyer pays for all costs of transportation, import customs formalities and duty fees, and all other formalities and charges related to the transportation of the shipment from the time the goods have been made available at the named place of destination.
6) Buyer would accept the seller’s transport documents provided they conform with the sales contract and will allow the buyer to take possession of the goods after delivery to the named place of destination.

Did you find this post useful? Then check out our complete overview of Incoterms 2000.

This interpretation is provided as a guide only.

Incoterms are published by the International Chamber of Commerce and are available on their website and official publication “Incoterms 2000″. For a complete and official overview please refer to the ICC’s publication.

Incoterms: DEQ – Delivered Ex Quay

DEQ

DEQ – Delivered Ex Quay – Well here it is the most popular Incoterm of all…..errr actually I have never seen this Incoterm used in my business dealings, but that is not to say that this particular Incoterm is of no value. The DEQ Incoterm is only used for ocean or inland waterway shipments. Under DEQ, the seller or exporter is responsible for clearing the goods for export and for making them available to the buyer on the quay (wharf) at the named port of destination. In order for this particular Incoterm to be used correctly a named port of destination must be stated. After the goods have been made available at the destination wharf, the buyer is then responsible for the import clearance, duties, inland delivery and all other destination fees incurred up to the final destination.

Under DEQ terms, the seller’s risks end the moment the goods have been made available at the destination port:
Seller’s Responsibilities:
1) Produces the goods and commercial documents as required by the sales contract.
2) Arranges for export clearance and all export formalities.
3) Arranges and pays for all costs for the transportation of the goods up to the agreed point in the named port or wharf of destination.
4) Assumes all risk to the goods (loss or damage) until the product has been made available to the buyer at the named port and quay (wharf).
5) Seller must advise the buyer that the goods have been delivered to the carrier.
6) Seller has to provide the buyer with transport documents that will allow the buyer to take possession of the goods at the agreed point in the named port of destination.

Buyer’s Responsibilities:
1) Buyer must pay for the goods as per the sales contract
2) Buyer must obtain all commercial documentation, licenses, and authorizations required for import and arrange for import clearance and formalities at own risk and cost.
3) Buyer takes delivery of the goods after they have been delivered by the seller to the named quay.
4) Buyer must assume all risks for the goods from the time the goods have been made available at the quay.
5) Buyer pays for all costs of transportation, import customs formalities and duty fees, and all other formalities and charges related to the transportation of the shipment from the time the goods have been delivered to the agreed quay at destination.
6) Buyer would accept the seller’s transport documents provided they conform with the sales contract and will allow the buyer to take possession of the goods after delivery to agreed quay at destination.

This interpretation is provided as a guide only.

Incoterms are published by the International Chamber of Commerce and are available on their website and official publication “Incoterms 2000″. For a complete and official overview please refer to the ICC’s publication.

Next Page »