okvn INCOTERMS 2010 S O C – TIL Course “INCOTERMS ARE ALL ABOUT DIVIDE COST RISK BETWEEN SELLER AND BUYER SOC” Incoterms EXW Ex Works Named Place Required Place.okvn INCOTERMS 2010 S O C – TIL Course “INCOTERMS ARE ALL ABOUT DIVIDE COST RISK BETWEEN SELLER AND BUYER SOC” Incoterms EXW Ex Works Named Place Required Place.
www.soc.edu.vn www.facebook.com/soc.edu.vn INCOTERMS 2010 S.O.C – TIL Course “INCOTERMS ARE ALL ABOUT DIVIDE COST & RISK BETWEEN SELLER AND BUYER - SOC” Incoterms EXW: Ex Works Named Place Required: Place of Delivery, Usually Seller’s Premises Applies to: The buyer covers all costs from seller’s door to final destination EXW, short for “Ex Works,” places most responsibility with the buyer The seller is expected to have the goods ready for collection at the agreed place of delivery (commonly the seller’s factory, mill, plant or warehouse) The buyer is accountable for all subsequent costs and risk, including all export procedures, starting with loading the goods onto a transport vehicle at the seller’s premises In practice, it is not uncommon for a seller to load goods onto the vehicle instead, at the risk and cost of the buyer—or even free of charge However, such an agreement must be made within the contract of sales If the buyer cannot handle the export processes and procedures, use FCA instead of EXW shipping EXW Incoterm – Obligations: Seller’s Obligations o Goods, commercial invoice and documentation www.soc.edu.vn www.facebook.com/soc.edu.vn o Place goods at buyer’s disposal at the named place on the agreed upon date o Notice to the buyer to enable delivery o Export packaging and marking Buyer’s Obligations o Pay the price of the goods as stated in sales contract o Provide seller with evidence of having taken delivery o Loading at seller’s location (unless otherwise agreed upon) o Export licenses and customs formalities o Pre-carriage to terminal o Loading charges o Main carriage o Discharge and onward carriage o Import formalities and duties o Cost of pre-shipment inspection Incoterms FCA: Free Carrier Named Place Requirement: Place of Delivery Applies to: Under the shipping terms for the FCA Incoterms (short for “Free Carrier”), the seller is responsible for export clearance and delivery of goods to the carrier at the named place of delivery Unless otherwise agreed upon, the seller is only responsible for loading the goods if the seller’s place of business is the named place of delivery www.soc.edu.vn www.facebook.com/soc.edu.vn A carrier is any person or company who undertakes the carriage, such as a shipping line, airline, trucking company, railway or freight forwarder Buyer must clearly specify the precise point of delivery in the contract of sales or carriage FCA Shipping Incoterm Obligations Seller’s Obligations o Goods, commercial invoice and documentation o Export packaging and marking o Export licenses and customs formalities o Pre-carriage to terminal o Delivery to named place of delivery o Cost of pre-shipment inspection o Proof of delivery Buyer’s Obligations o Payment for goods at price agreed upon in sales contract o Unloading from arriving means of transportation o Loading charges o Main carriage o Discharge and onward carriage o Import formalities and duties o Cost of pre-shipment inspection (for import clearance) Incoterms FAS: Free Alongside Ship Named Place Requirement: Port of Shipment Applies to: Sea and inland waterway only www.soc.edu.vn www.facebook.com/soc.edu.vn In the Incoterms rules for FAS (short for “Free Alongside Ship”), the seller clears goods for export and places them alongside the vessel at the named port of departure The named port of departure location can be a loading dock or a barge, but not a container terminal The buyer is responsible for loading the freight onto the vessel, as well as handling local carriage, discharge, import formalities and duties and onward carriage to the final destination FAS only applies to ocean or inland waterway transport It is popular with bulk cargo, such as oil or grain For containerized shipments delivered only to a terminal, use FCA instead Seller pays all expenses until freight is on the vessel, then buyer takes over Free Alongside Ship Incoterm Obligations Seller’s Obligations o Goods, commercial invoice and documentation o Export packaging and marking o Export licenses and customs formalities o Pre-carriage to terminal o Delivery alongside vessel at port of shipment o Proof of delivery o Cost of pre-shipment inspection Buyer’s Obligations o Pay the price of the goods as provided in the sales contract o Loading charges o Main carriage o Discharge and onward carriage o Import formalities and duties www.soc.edu.vn www.facebook.com/soc.edu.vn o Cost of pre-shipment inspection (for import clearance) Incoterms FOB: Free on Board Named Place Requirement: Port of Shipment Applies to: Sea and inland waterway only Under the terms of FOB (short for “Free on Board”), the seller clears the goods for export and ensures they are delivered to and loaded onto the vessel for transport at the named port of departure The buyer takes over risk and costs, including import clearance and duties, as soon as the goods are loaded onto the transport vessel at the port of departure FOB only applies to ocean or inland waterway transport As such, the named place is always a port It does not apply if the main carriage is via air, ground or rail This term is commonly used for bulk cargo (such as oil or grain) or freight from Asia Seller pays all costs up to main carriage, then buyer takes over all cost responsibility FOB Incoterm Obligations Seller’s Obligations o Goods, commercial invoice and documentation o Export packaging and marking o Export licenses and customs formalities o Pre-carriage and delivery o Loading charges o Delivery onboard vessel at named port of shipment www.soc.edu.vn www.facebook.com/soc.edu.vn o Proof of delivery o Cost of pre-shipment inspection Buyer’s Obligations o Payment for goods as specified in sales contract o Main carriage o Discharge and onward carriage o Import formalities and duties o Cost of pre-shipment inspection (for import clearance) Incoterms CFR: Cost and Freight Named Place Requirement: Port of Destination Applies to: Sea and inland waterway only Under CFR terms (short for “Cost and Freight”), the seller is required to clear the goods for export, deliver them onboard the ship at the port of departure, and pay for transport of the goods to the named port of destination The risk passes from seller to buyer when the seller delivers the goods onboard the ship The buyer is responsible for paying all additional transport costs from the port of destination, including import clearance and duties Only use CFR for ocean or inland waterway transport If the freight is containerized and to be delivered to a terminal only, use CPT instead Risk and cost transfer from seller to buyer at different points CFR Shipping | Incoterms Obligations www.soc.edu.vn www.facebook.com/soc.edu.vn Seller’s Obligations o Goods, commercial invoice and documentation o Export packaging and marking o Export licenses and customs formalities o Pre-carriage and delivery o Loading charges o Delivery at named port of destination o Proof of delivery o Cost of pre-shipment inspection Buyer’s Obligations o Payment for goods as specified in sales contract o Risk starting with onboard delivery o Discharge and onward carriage o Import formalities and duties o Cost of pre-shipment inspection (for import clearance) Incoterms CIF: Cost, Insurance and Freight Named Place Requirement: Port of Destination Applies to: Sea and inland waterway only Under CIF (short for “Cost, Insurance and Freight”), the seller delivers the goods, cleared for export, onboard the vessel at the port of shipment, pays for the transport of the goods to the port of destination, and also obtains and pays for minimum insurance coverage on the goods through their journey to the named port of destination The buyer assumes all risk once the goods are on board the vessel for the main carriage; however, they don’t take on any costs until the freight arrives at the named port of destination www.soc.edu.vn www.facebook.com/soc.edu.vn CIF applies to ocean or inland waterway transport only It is commonly used for bulk cargo, oversized or overweight shipments If the freight is containerized and delivered only to the terminal, use CIP instead If using CIP instead, insurance coverage defaults to all-risk; however, the parties may negotiate a lower coverage requirement The seller is obligated to secure insurance for the buyer, but only for minimum coverage CIF Incoterm Obligations Seller’s Obligations o Goods, commercial invoice and documentation o Export packaging and marking o Export licenses and customs formalities o Pre-carriage and delivery o Loading charges o Delivery at named port of destination o Proof of delivery o Cost of pre-shipment inspection o Minimum insurance coverage Buyer’s Obligations o Payment for goods as specified in sales contract o Discharge and onward carriage o Import formalities and duties o Cost of import clearance pre-shipment inspection Incoterms CPT: Carriage Paid To Named Place Requirement: Place of Destination Applies to: www.soc.edu.vn www.facebook.com/soc.edu.vn Carriage Paid To (CPT) rules require the seller to clear the goods and arrange carriage (by one or more transport modes) to the named place of destination The seller does not need to obtain or pay for insurance A carrier is any person or company who undertakes the carriage of the goods, such as a shipping line, airline, trucking company, railway or freight forwarder In multimodal shipments, the place of shipment is the first carrier used Under CPT rules, the seller’s risk ends, and the buyer’s risk begins, when the first carrier receives the goods from the seller However, the buyer is only responsible for additional costs after the goods arrive at the final destination CPT is often used in air freight, containerized ocean freight, small parcel shipments and “ro-ro” shipments of motor vehicles The transfer of risk and cost from seller to buyer occur at different points CPT Incoterm Obligations Seller’s Obligations o Goods, commercial invoice and documentation o Export packaging and marking o Export licenses and customs formalities o Pre-carriage and delivery o Loading charges o Cost of delivery at named place of destination o Proof of delivery o Cost of pre-shipment inspection Buyer’s Obligations o Payment for goods as specified in sales contract o Import formalities and duties www.soc.edu.vn www.facebook.com/soc.edu.vn o Cost of import clearance pre-shipment inspection Incoterms CIP: Carriage and Insurance Paid To Named Place Requirement: Place of Destination Applies to: In Carriage and Insurance Paid To (CIP), the seller assumes all risk until the goods are delivered to the first carrier at the place of shipment—not the place of destination Once the goods are delivered to the first carrier, the buyer is responsible for all risks However, the seller is responsible for the cost of carriage as well as all-risk insurance coverage until the freight reaches the named place of destination A carrier is any person or company who undertakes the carriage of goods, such as a shipping line, airline, trucking company, railway or freight forwarder In multimodal shipments, the place of shipment is the first carrier used Same as CPT, but the seller is obligated to secure all-risk insurance coverage CIP Incoterm Obligations Seller’s Obligations o Goods, commercial invoice and documentation o Export packaging and marking o Export licenses and customs formalities o Pre-carriage and delivery o Loading charges o Cost of delivery at named place of destination www.soc.edu.vn www.facebook.com/soc.edu.vn o Proof of delivery o Cost of pre-shipment inspection o All-risk insurance coverage Buyer’s Obligations o Payment for goods as specified in sales contract o Import formalities and duties o Cost of import clearance pre-shipment inspection Incoterms DAT: Delivered At Terminal Named Place Required: Terminal at Port or Place of Destination Applies to: Under Incoterms 2020, the rule formerly called Delivered at Terminal (DAT) is now referred to as Delivered at Place Unloaded (DPU) Delivered At Terminal refers to the seller delivering the goods, once unloaded from the arriving means of transport Goods are placed at the disposal of the buyer at the named terminal, at the named port or place of destination DAT is used irrespective of the mode of transport selected and may also be used where more than one mode of transport is utilized The specific point within the terminal at the place of destination should clearly be specified as agreed upon DAT requires the seller to clear goods for export, where applicable, without any obligation to clear the goods for import, pay import duty or carry out import customs formalities It is important to clearly specify the precise point at or within the terminal where the goods will be unloaded www.soc.edu.vn www.facebook.com/soc.edu.vn DAT Incoterm Obligations Seller’s Obligations o Goods, commercial invoice and documentation o Export packaging and marking o Export licenses and customs formalities o Pre-carriage and delivery o Loading charges o Main carriage o Delivery at named terminal at port or place of destination o Proof of delivery Buyer’s Obligations o Onward carriage o Import formalities and duties o Cost of pre-shipment inspection o Delivery to buyer Incoterms DAP: Delivered at Place Named Place Required: Place of Destination Applies to: Under the Delivered At Place (DAP) Incoterms rules, the seller is responsible for delivery of the goods, ready for unloading, at the named place of destination The seller assumes all risks involved up to unloading Unloading is at the buyer’s risk and cost DAP can apply to any—and more than one—mode of transport The buyer and seller should specify and agree upon the precise unloading spot at the named place of destination www.soc.edu.vn www.facebook.com/soc.edu.vn Unless otherwise agreed between both parties, the seller cannot request renumeration for unloading costs incurred under the contract of carriage DAP rules require the seller to clear goods for export, where applicable, without any obligation to clear the goods for import, pay import duty or carry out import customs formalities Specify the precise unloading spot at the named place of destination DAP Shipping Obligations Seller’s Obligations o Goods, commercial invoice and documentation o Export packaging and marking o Export licenses and customs formalities o Pre-carriage and delivery o Loading charges o Cost of pre-shipment inspection o Main carriage o Delivery to named place of destination o Proof of delivery Buyer’s Obligations o Payment for goods as specified in sales contract o Unloading from arriving means of transportation o Import formalities and duties o Cost of import clearance pre-shipment inspection o Onward carriage and delivery to buyer (depending on named place) Incoterms DDP: Delivered Duty Paid Named Place Required: Place of Destination Applies to: www.soc.edu.vn www.facebook.com/soc.edu.vn Under the Delivered Duty Paid (DDP) Incoterm rules, the seller assumes all responsibilities and costs for delivering the goods to the named place of destination The seller must pay both export and import formalities, fees, duties and taxes The seller is not obligated to insure the goods for pre-carriage or main carriage The buyer is free of any risk or cost until the goods are unloaded from the vehicle at the named place of destination, usually the buyer’s place of business DDP is the only Incoterms rule that places responsibility for import clearance and payment of taxes and/or import duty on the seller These last requirements can be problematic for the seller In countries with complex or bureaucratic import clearance procedures a seller with local knowledge may prefer to take on these responsibilities The seller is responsible for all costs and risk until the goods are unloaded DDP Incoterm Obligations Seller’s Obligations o Goods, commercial invoice and documentation o Export packaging and marking o Export licenses and customs formalities o Pre-carriage and delivery o Loading charges o Main carriage o Proof of delivery o Import formalities and duties o Cost of all inspections o Delivery to named place of destination www.soc.edu.vn www.facebook.com/soc.edu.vn Buyer’s Obligations o Payment for goods as specified in sales contract o Assist seller in obtaining any documents or information necessary for export or import clearance formalities ... onward carriage o Import formalities and duties www .soc. edu.vn www.facebook.com /soc. edu.vn o Cost of pre-shipment inspection (for import clearance) Incoterms FOB: Free on Board Named Place Requirement:... formalities o Pre-carriage and delivery o Loading charges o Delivery onboard vessel at named port of shipment www .soc. edu.vn www.facebook.com /soc. edu.vn o Proof of delivery o Cost of pre-shipment inspection... Cost of import clearance pre-shipment inspection Incoterms CPT: Carriage Paid To Named Place Requirement: Place of Destination Applies to: www .soc. edu.vn www.facebook.com /soc. edu.vn Carriage Paid