INCOTERMS 2020: EXW, FCA, FAS, FOB, CFR, CIF, DDP, & DPU
Understanding Incoterms 2020: A Guide to Ocean Freight Terms with Eurovan International
In the complex world of international trade, understanding the specific terms of shipping agreements is crucial. The International Commercial Terms, or Incoterms, provide a standardized set of rules to clarify the responsibilities of buyers and sellers involved in international transactions. Eurovan International, a leader in logistics and freight forwarding, leverages these terms to ensure smooth and clear transactions. This article delves into the Incoterms 2020 with a focus on ocean freight terms, making it easier to grasp the roles and responsibilities of each party.
EXW (Ex Works): Incoterms 2020
Definition and Responsibilities
Ex Works (EXW): The seller makes the goods available at their premises or another named place. Sometimes the location is a factory or a warehouse. The buyer bears all costs and risks involved in taking the goods from the seller’s location to the desired destination.
Seller’s Responsibilities with Incoterms 2020: EXW
- Making the goods available for pickup at the specified location.
Buyer’s Responsibilities with Incoterms 2020: EXW
- Handling all transportation, export documentation, customs clearance, and import procedures.
- Bearing all risks and costs from the seller’s premises to the final destination.
Incoterms 2020: Real-Life Analogy about EXW
Think of EXW as buying a product directly from a farmer’s market. The seller (farmer) provides the goods at their stall, but it’s your responsibility to transport the goods home. You are responsible to handle any necessary packaging and deal with any issues during transportation.
Example of Incoterms 2020: EXW
A buyer in Spain purchases machinery from a seller in Egypt. Under EXW, the seller at Eurovan International ensures the machinery is ready for pickup at their Cairo warehouse. The buyer arranges for a truck to collect the machinery. The buyer handles all export documents, and covers the shipping costs to Spain.
Ex Works (EXW) is used in international trade and specifies the obligations of the buyer and seller.
Here are some unique facts about EXW (Ex Works):
Minimum Seller Obligation
EXW places the minimum responsibility on the seller. The seller’s obligation is fulfilled once the goods are made available for pickup at their premises (factory, warehouse, etc.) or another named place (works, factory, warehouse, etc.).
Buyer’s Responsibility
Under EXW, the buyer is responsible for all costs and risks involved in taking the goods from the seller’s premises to the final destination. This includes loading, transportation, export customs clearance, and import duties.
Risk Transfer Point
The risk of loss or damage to the goods transfers from the seller to the buyer as soon as the goods are made available for pickup. The buyer bears all risks from that point onwards.
Export and Import Clearance
The buyer is responsible for both export and import customs clearance, including all necessary documentation, duties, and taxes. This can be complex, especially in countries with stringent export regulations.
Loading Costs
Unless otherwise agreed, the buyer is responsible for the costs of loading the goods onto the transport vehicle at the seller’s premises. If the seller assists with loading, this should be explicitly stated in the contract.
Insurance
Under EXW, the seller has no obligation to arrange insurance. It is the buyer’s responsibility to obtain insurance if they want to protect the goods during transit.
Ideal for Domestic Transactions
EXW is often used in domestic transactions or situations where the buyer has a strong logistics network and can manage the transportation and export process efficiently.
Documentation
The seller must provide the commercial invoice and any documents that the buyer might need to take delivery of the goods. However, any additional documentation required for export and import must be arranged by the buyer.
Clarity in Contract
The contract should clearly specify the exact point at the seller’s premises where the goods will be made available. This avoids any misunderstandings regarding the pickup location.
Common Use in Certain Industries
EXW is commonly used in industries where buyers prefer to have complete control over the transportation process, such as in certain manufacturing and raw material sectors.
Variations in Practices
In practice, EXW can vary widely depending on the buyer and seller’s agreement. Sometimes sellers might assist with export clearance and loading, even though it’s not required under EXW terms.
Currency and Payment Terms
Payment terms under EXW can vary, but they often involve the buyer arranging payment before picking up the goods to minimize the seller’s risk.
Consideration of Export Restrictions
In countries with strict export controls, EXW might not be the best option as the buyer must handle all export formalities, which can be challenging without local knowledge.
Use in E-commerce and International Trade
While EXW is less common in international trade due to the complexity of export and import processes, it is sometimes used in e-commerce when the buyer arranges international shipping and handles customs.
Cost Efficiency for Buyers
For buyers with robust logistics capabilities and experience in handling customs, EXW can be cost-efficient as they can directly control and potentially reduce transportation and handling costs.
Understanding EXW is essential for businesses engaged in international trade, as it outlines the minimal obligations of the seller and extensive responsibilities of the buyer, ensuring clarity and proper management of logistics and risks in the transaction.
EXW (Ex Works)
FCA (Free Carrier): Incoterms 2020
Definition and Responsibilities
Free Carrier (FCA) requires the seller to deliver the goods to a carrier or another person nominated by the buyer at the seller’s premises or another named place. From that point, the buyer assumes all risks and costs.
Seller’s Responsibilities:
- Delivering the goods to the carrier nominated by the buyer.
- Handling export clearance if required.
Buyer’s Responsibilities:
- Arranging and paying for the main carriage.
- Assuming all risks and costs once the goods are handed over to the carrier.
Real-Life Analogy
FCA is like ordering a package and specifying a courier service to pick it up from the seller’s address. The seller ensures the package is ready and hands it over to your chosen courier. Once the courier has it, you’re responsible for any shipping issues.
Example
An electronics company in Germany orders components from an Egyptian supplier. The supplier delivers the components to a carrier at their factory, completing all necessary export procedures. The German company then manages the shipment from the carrier’s possession to their facility.
FCA (Free Carrier)
FAS (Free Alongside Ship): Incoterms 2020
Definition and Responsibilities
Free Alongside Ship (FAS) means the seller delivers the goods alongside the vessel at the named port of shipment. Consequently, the buyer bears all costs and risks from that point forward. Therefore, the buyer must handle loading the goods onto the ship, as well as all subsequent transportation and import costs. FAS is often used in bulk shipping scenarios where the buyer has more control over the loading process. Moreover, it ensures the seller fulfills their obligation once the goods are placed alongside the vessel, ready for loading.
Seller’s Responsibilities: FAS (Free Alongside Ship)
- Delivering the goods alongside the vessel at the port of shipment.
Buyer’s Responsibilities: FAS (Free Alongside Ship)
- Handling loading, main carriage, and unloading costs.
- Bearing all risks from the point the goods are alongside the ship.
Real-Life Analogy: FAS (Free Alongside Ship)
Imagine a seller bringing goods to the dock but not loading them onto the ship. At this point, the buyer must then take over the process, ensuring the goods are safely loaded onto the vessel and transported. This transition highlights the shift in responsibility and risk from the seller to the buyer at a specific location, illustrating a common practice in international trade under FAS (Free Alongside Ship): Incoterms 2020 terms.
Example of FAS (Free Alongside Ship)
A buyer in Brazil purchases bulk raw materials from an Egyptian supplier. The supplier delivers the materials to the dock in Alexandria, Egypt. From there, the Brazilian buyer arranges for the loading and shipping to their factory under FAS (Free Alongside Ship): Incoterms 2020.
Free Alongside Ship (FAS) is a commercial term used in international trade under Incoterms 2020.
Here are some unique facts about FAS (Free Alongside Ship):
Definition
FAS means that the seller must deliver the goods alongside the vessel nominated by the buyer at the named port of shipment. The risk of loss or damage to the goods passes to the buyer when the goods are alongside the ship.
Pre-1936 Usage
The term FAS has been in use long before the establishment of Incoterms by the International Chamber of Commerce (ICC) in 1936. It was a standard term in maritime shipping for centuries, facilitating global trade.
Cost Division
Under FAS, the seller is responsible for the costs up to the point of delivery alongside the ship. This includes export clearance and any fees or charges incurred before the goods are placed alongside the ship. The buyer bears all costs from that point onward, including loading, shipping, insurance, and import duties.
Risk Transfer
The transfer of risk from seller to buyer occurs when the goods are placed alongside the ship, not when they are loaded on the ship. This differentiates FAS from other terms like FOB (Free on Board), where the risk transfers when the goods pass the ship’s rail.
Export Clearance
One of the seller’s responsibilities under FAS is to clear the goods for export. This involves obtaining all necessary export licenses and handling customs formalities, which can vary significantly depending on the country of origin.
Application to Bulk Cargo
FAS is particularly suitable for bulk cargo, such as minerals, grains, and raw materials, where the buyer typically arranges for the transportation and has the flexibility to choose the shipping vessel.
Insurance Implications
Because the risk transfers to the buyer once the goods are alongside the ship, it is crucial for the buyer to arrange for marine insurance from this point. FAS does not oblige the seller to provide insurance beyond the delivery point.
Documentation
Under FAS, the seller provides the buyer with a commercial invoice and evidence of delivery of the goods alongside the vessel. The buyer needs to arrange for the bill of lading and other shipping documents.
Common in Commodities Trade
FAS is frequently used in the commodities trade, where large quantities of goods are shipped in bulk. It allows buyers, often large trading companies or manufacturers, to control the shipping process more closely.
Incoterms Variations
While FAS is an Incoterm primarily used for sea and inland waterway transport, it can be part of more complex multimodal transport arrangements. However, its use is less common in containerized shipping, where other terms like FOB and CIF (Cost, Insurance, and Freight) are more prevalent.
Understanding FAS is crucial for businesses engaged in international trade, as it defines specific responsibilities and risks for both buyers and sellers, ensuring clarity in commercial transactions.
FAS (Free Alongside Ship)
FOB (Free On Board): Incoterms 2020
Definition and Responsibilities of FOB (Free On Board)
Free On Board (FOB) indicates that the seller delivers the goods on board the vessel at the named port of shipment. Consequently, the risk and cost transfer to the buyer once the goods are on board the vessel. Therefore, the buyer assumes responsibility for the goods’ transportation and any associated costs from that point onward. This term ensures that the seller handles all export documentation and costs up to the point of loading the goods onto the vessel.
Seller’s Responsibilities: FOB (Free On Board)
- Loading the goods onto the vessel.
- Handling export clearance.
Buyer’s Responsibilities: FOB (Free On Board)
- Paying for the main carriage and all subsequent costs.
- Bearing all risks once the goods are on board the vessel.
Real-Life Analogy: FOB (Free On Board)
FOB is like having a seller put a package on a courier truck. Once the package is on the truck, the responsibility shifts to the buyer, who must ensure it reaches its destination.
Example of FOB (Free On Board)
An Italian furniture company orders materials from Egypt. The Egyptian supplier loads the materials onto a ship at Port Said. Once the materials are on the vessel, the Italian company takes responsibility for the transportation and costs under FOB (Free On Board): Incoterms 2020.
FOB (Free On Board)
CFR (Cost and Freight): Incoterms 2020
Definition and Responsibilities
Cost and Freight (CFR) requires the seller to pay the costs and freight to bring the goods to the port of destination. However, the risk transfers to the buyer once the goods are on board the vessel.
Seller’s Responsibilities:
- Paying for the freight to the destination port.
- Handling export clearance and delivering the goods on board.
Buyer’s Responsibilities:
- Assuming risk once the goods are on board.
- Handling import clearance and subsequent costs.
Real-Life Analogy
CFR is similar to ordering something with the seller covering shipping costs but with the risk of loss or damage during transit being the buyer’s responsibility.
Example
A construction firm in the USA orders steel beams from Egypt. The Egyptian supplier pays for the ocean freight to the port in New York but the American firm bears the risk once the steel is loaded onto the vessel in Alexandria, Egypt, under CFR Incoterms 2020.
Cost and Freight (CFR) is an Incoterm used in international trade that outlines the responsibilities of the buyer and seller.
Here are some unique facts about CFR (Cost and Freight):
Seller’s Responsibilities
Under CFR, the seller is responsible for arranging and paying for the transport of the goods to the named port of destination. This includes the cost of freight but not insurance.
Risk Transfer Point of CFR
The risk of loss or damage to the goods transfers from the seller to the buyer once the goods are loaded onto the shipping vessel at the port of origin. This is a key difference from CIF (Cost, Insurance, and Freight), where the seller also covers insurance.
Cost Division under CFR
While the seller pays for the freight to the destination port, the buyer assumes all risks and additional costs after the goods are on board, including unloading, import duties, and inland transportation.
Insurance
Unlike CIF, the seller under CFR is not obligated to arrange insurance for the goods. It is the buyer’s responsibility to obtain insurance if they want to protect against potential damage or loss during transit.
Documentation for CFR
The seller must provide the buyer with the necessary shipping documents, such as the bill of lading, commercial invoice, and packing list. These documents are essential for the buyer to claim the goods upon arrival and for customs clearance.
Port of Destination under CFR
The named port of destination must be specified clearly in the sales contract. The seller’s obligation is to deliver the goods to this port.
Common Use of CFR
CFR is commonly used for bulk cargo and commodities, such as oil, grain, and minerals, where the buyer often has established arrangements for insurance and inland transportation.
Customs Clearance Responsibilities for CFR
The seller is responsible for export customs clearance. However, the buyer is responsible for import customs clearance and associated duties and taxes.
Applicability
CFR is applicable only to sea and inland waterway transport. It is not suitable for multimodal transport, where the goods are transported by different modes (e.g., road, rail, and sea).
Negotiation of Freight Rates with CFR
The seller negotiates the freight rates with the shipping company and bears the cost. This can be advantageous for buyers, especially those who may not have favorable shipping terms with carriers.
Timing of Payment
Payment terms under CFR can vary, but it often involves a letter of credit or cash against documents, where the buyer pays upon receipt of the shipping documents.
Contract Clauses
It’s important to specify details such as the port of shipment, port of destination, and any additional services included, such as loading or handling fees, to avoid disputes.
Early Arrival Risks for CFR
If the goods arrive before the buyer is ready to receive them, the buyer bears the costs of storage and handling at the destination port.
Historical Context
CFR and other Incoterms were developed by the International Chamber of Commerce (ICC) to provide a standard set of international trade terms, helping to reduce confusion and disputes in global trade.
Understanding CFR is crucial for international traders as it defines the clear division of costs and risks between the seller and buyer, ensuring smooth commercial transactions and efficient logistics management.
CFR (Cost and Freight)
CIF (Cost, Insurance, and Freight): Incoterms 2020
Definition and Responsibilities
Cost, Insurance, and Freight (CIF) obligates the seller to pay the costs, insurance, and freight to bring the goods to the port of destination. The risk transfers to the buyer once the goods are on board the vessel.
Seller’s Responsibilities:
- Paying for the freight and insurance to the destination port.
- Handling export clearance and delivering the goods on board.
Buyer’s Responsibilities:
- Assuming risk once the goods are on board.
- Handling import clearance and subsequent costs.
Real-Life Analogy
CIF is like purchasing a valuable item where the seller includes shipping and insurance costs, but the risk of damage or loss during transit falls on the buyer.
Example
A Canadian company imports textiles from Egypt. Under the terms of CIF, the Egyptian seller covers ocean freight and insurance to the port in Montreal. Once the textiles are on the vessel, the risk transfers to the Canadian buyer, who handles customs and transport to their warehouse under CIF Incoterms 2020.
Cost, Insurance, and Freight (CIF) is one of the Incoterms used in international trade.
Here are some unique facts about CIF (Cost, Insurance, and Freight):
Comprehensive Seller’s Responsibility
Under CIF, the seller is responsible for arranging and paying for the transportation of goods to the named port of destination, including the cost of freight and marine insurance.
Insurance Coverage
One of the key differences between CIF and CFR is that CIF includes the cost of insurance. The seller must procure insurance coverage for the goods in transit, covering at least the minimum coverage of Clause (C) of the Institute Cargo Clauses, which is typically 110% of the contract value.
Risk Transfer Point
Although the seller pays for the transportation and insurance to the destination port, the risk of loss or damage to the goods transfers to the buyer once the goods are loaded onto the shipping vessel at the port of origin.
Documentation
The seller must provide the buyer with the commercial invoice, bill of lading, insurance certificate, and packing list. These documents are necessary for the buyer to claim the goods upon arrival and for customs clearance.
Port of Destination
The named port of destination must be clearly specified in the sales contract. The seller’s obligation is to deliver the goods to this port, including paying for the transportation and insurance.
Suitable for Bulk Cargo
CIF is commonly used for bulk cargo and commodities, where the seller arranges for the transportation and insurance, providing convenience to the buyer.
Export and Import Customs
The seller is responsible for export customs clearance, while the buyer is responsible for import customs clearance, duties, and taxes.
Applicability
CIF applies only to sea and inland waterway transport. It is not suitable for multimodal transport where goods are transported by different modes, such as road, rail, and air.
Negotiation of Freight and Insurance Rates
The seller negotiates both the freight and insurance rates. Buyers benefit from the seller’s established relationships with shipping and insurance companies, potentially leading to better rates and coverage.
Early Arrival Risks
If the goods arrive before the buyer is ready to receive them, the buyer bears the costs of storage and handling at the destination port.
Contract Specifics
It is essential to specify the port of shipment, port of destination, type of insurance coverage, and any additional services included, such as loading fees, in the contract to avoid disputes.
Risk and Cost Division
The seller bears the cost and risk until the goods are loaded onto the shipping vessel. After that, the risk transfers to the buyer, but the seller still covers the cost of freight and insurance until the destination port.
Historical Context
CIF and other Incoterms were developed by the International Chamber of Commerce (ICC) to standardize international trade terms, reducing misunderstandings and disputes in global trade.
Common Use in International Trade
CIF is one of the most widely used Incoterms because it provides a clear division of responsibilities and risks, making it easier for buyers, especially those who prefer the seller to handle transportation and insurance logistics.
Understanding CIF is crucial for international traders as it outlines the seller’s extensive responsibilities, including arranging transportation and insurance, while also clarifying the point at which the risk transfers to the buyer, ensuring a smooth and efficient trade process.
CIF (Cost, Insurance, and Freight)
CPT (Carriage Paid To): Incoterms 2020
Definition and Responsibilities
Carriage Paid To (CPT) means the seller pays for carriage to the named place of destination. The risk transfers to the buyer when the goods are handed over to the first carrier.
Seller’s Responsibilities:
- Paying for transportation to the destination.
- Delivering the goods to the first carrier.
Buyer’s Responsibilities:
- Assuming risk once the goods are handed to the first carrier.
- Handling import clearance and subsequent costs.
Real-Life Analogy
CPT is akin to booking a flight where the airline covers transport to your destination, but once you check in your luggage, the airline takes responsibility for it.
Example
A French retailer orders goods from Egypt. The Egyptian seller pays for the transport to Paris, but once the goods are handed to the first carrier in Cairo, the risk transfers to the French retailer.
CPT (Carriage Paid To)
CIP (Carriage and Insurance Paid To): Incoterms 2020
Definition and Responsibilities
Carriage and Insurance Paid To (CIP) requires the seller to pay for carriage and insurance to the named place of destination. The risk transfers to the buyer when the goods are handed over to the first carrier.
Seller’s Responsibilities:
- Paying for transportation and insurance to the destination.
- Delivering the goods to the first carrier.
Buyer’s Responsibilities:
- Assuming risk once the goods are handed to the first carrier.
- Handling import clearance and subsequent costs.
Real-Life Analogy
CIP is like buying an insured package delivery where the seller pays for shipping and insurance, but the buyer takes on the risk once the package is handed to the first carrier.
Example
An Australian business buys pharmaceuticals from Egypt. Under the terms of CIP, The Egyptian seller covers ocean freight and insurance to Sydney. Once the goods are handed to the carrier in Egypt, the Australian buyer assumes the risk.
Carriage and Insurance Paid To (CIP)
DAP (Delivered At Place): Incoterms 2020
Definition and Responsibilities
Delivered At Place (DAP) means the seller delivers the goods when they are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination. The seller bears all risks involved in bringing the goods to the named place.
Seller’s Responsibilities:
- Delivering the goods to the named place.
- Bearing all risks until the goods are ready for unloading.
Buyer’s Responsibilities:
- Unloading the goods.
- Handling import clearance and subsequent costs.
Real-Life Analogy
DAP is like ordering furniture delivered to your home. The seller covers all transport and risks until the furniture arrives at your door, but you are responsible for unloading it.
Example
A Japanese retailer orders electronics from Egypt. The Egyptian seller delivers the electronics to the retailer’s warehouse in Tokyo. The retailer is responsible for unloading the shipment and handling import procedures.
DAP (Delivered At Place)
DPU (Delivered at Place Unloaded): Incoterms 2020
Definition and Responsibilities
Delivered at Place Unloaded (DPU) indicates that the seller delivers the goods, once unloaded, to the named place of destination. The seller bears all risks involved in bringing the goods to and unloading them at the named place of destination under Incoterm 2020: DPU (Delivered at Place Unloaded).
Seller’s Responsibilities: DPU (Delivered at Place Unloaded)
- Delivering and unloading the goods at the named place.
- Bearing all risks until the goods are unloaded.
Buyer’s Responsibilities: DPU (Delivered at Place Unloaded)
- Handling import clearance and subsequent costs.
Real-Life Analogy: DPU (Delivered at Place Unloaded)
DPU is like having a delivery service bring and unload a large item at your specified location. The seller takes care of everything until the item is unloaded at your place.
Example of DPU (Delivered at Place Unloaded)
A South African company orders industrial equipment from Egypt. In terms of ocean freight, The Egyptian seller delivers and unloads the equipment at the buyer’s site in Johannesburg, covering all risks and costs until unloading.
DPU (Delivered at Place Unloaded)
DDP (Delivered Duty Paid): Incoterms 2020
Definition and Responsibilities
Delivered Duty Paid (DDP) means the seller delivers the goods when they are placed at the disposal of the buyer, cleared for import, and ready for unloading at the named place of destination. The seller bears all costs and risks involved in bringing the goods to the destination, including import duties and taxes under Incoterm 2020: DDP (Delivered Duty Paid).
Seller’s Responsibilities: DDP (Delivered Duty Paid)
- Delivering the goods to the named place, cleared for import.
- Bearing all costs and risks until the goods are ready for unloading.
Buyer’s Responsibilities: DDP (Delivered Duty Paid)
- Unloading the goods.
Real-Life Analogy: DDP (Delivered Duty Paid)
DDP is like having a product delivered to your home with all customs duties and taxes prepaid by the seller. The seller ensures the product is delivered ready for you to use without additional costs.
Example of DDP (Delivered Duty Paid)
A UK retailer imports fashion items from Egypt. The Egyptian seller covers all shipping, insurance, and import duties, delivering the goods to the retailer’s warehouse in London. The retailer only needs to unload the goods.
Delivered Duty Paid (DDP) is another Incoterm used in international trade that specifies the seller’s responsibilities and costs.
Here are some unique facts about DDP (Delivered Duty Paid):
Seller’s Maximum Responsibility
DDP places the maximum level of responsibility on the seller. The seller is responsible for delivering the goods to the buyer’s specified destination, bearing all costs and risks associated with transporting the goods, including duties, taxes, and customs clearance.
End-to-End Coverage
The seller must cover all aspects of the delivery, including export clearance, shipping, insurance, and import duties. The buyer only needs to receive the goods at the agreed location and unload them.
Import Clearance
Under DDP, the seller is responsible for handling the import clearance process, including payment of import duties and taxes. This can be complex, as the seller must be familiar with the import regulations and tariffs of the buyer’s country.
DDP Delivery Location
The agreed delivery location must be specified clearly in the sales contract. It could be the buyer’s premises, a warehouse, or another specified destination. The seller bears all risks until the goods are delivered to this location.
Suitable for Established Sellers
DDP is often used by sellers with established logistics networks and experience in international trade, as it requires comprehensive knowledge of both export and import procedures.
Risk and Cost Transfer of DDP
The risk and cost transfer from the seller to the buyer only after the goods have been delivered to the specified location and are ready for unloading. This contrasts with other Incoterms where the risk may transfer earlier.
Simplifies Buyer’s Role
DDP simplifies the buyer’s role in the transaction, making it ideal for buyers who prefer minimal involvement in the logistics process. Buyers can avoid dealing with customs, duties, and transportation issues.
Insurance Considerations
While the seller is responsible for insurance under DDP, it’s crucial to ensure that the insurance coverage is adequate for the entire journey until delivery at the buyer’s specified location.
DDP Documentation
The seller must provide all necessary documents, including the commercial invoice, packing list, bill of lading or airway bill, insurance certificate, and any other documents required for import clearance.
Higher Selling Price
Because the seller assumes all costs and risks, the selling price under DDP is typically higher compared to other terms where the buyer assumes some of the responsibilities. Sellers must carefully calculate all potential costs to avoid losses.
Commonly Used in E-commerce
DDP is increasingly popular in e-commerce and B2C transactions, where buyers expect a seamless delivery experience. It allows sellers to offer a fully inclusive price, enhancing customer satisfaction.
Flexibility in Payment Terms
Payment terms under DDP can be flexible. For instance, sellers might require full payment upfront due to the high costs involved, or they might agree to a partial payment upon delivery.
Understanding DDP is essential for businesses involved in international trade, as it ensures clarity on the seller’s comprehensive responsibilities, providing a smooth transaction process for buyers who prefer minimal involvement in logistics and customs procedures.
DDP (Delivered Duty Paid)
Incoterms 2020 Conclusion
INCOTERMS 2020: EXW, FCA, FAS, FOB, CFR, CIF, DDP, & DPU, understanding these Incoterms is essential for anyone involved in international trade. At Eurovan International, we ensure that our clients are fully informed about their responsibilities and the costs involved. By choosing the right ocean freight terms, businesses can manage their logistics more efficiently and avoid misunderstandings. Whether you’re new to international shipping or looking to optimize your current processes, grasping these terms will undoubtedly benefit your operations.
SOURCES
here are some credible sources you can refer to for detailed ocean freight terms information on Incoterms 2020:
International Chamber of Commerce (ICC) Official Website: Incoterms® 2020 Overview
ICC Digital Library: Incoterms® 2020 Publications and Resources
International Chamber of Commerce: Incoterms® 2020 Release Announcement
International Chamber of Commerce: Detailed Explanation of Incoterms® 2020 Rules
ICC Knowledge 2 Go: Comprehensive Guide and Training Resources for Incoterms® 2020
These sources provide extensive information and official guidelines on the latest Incoterms, helping businesses understand their obligations and streamline international trade processes.
