Incoterms 2010 - international delivery conditions
Incoterms are internationally recognized rules that describe who is responsible for the goods during transport or when responsibilities are transferred between the buyer and seller. By referring to these rules, sellers and buyers avoid unnecessary misunderstandings when doing business.
Incoterms are recognized by the authorities and courts around the world and works very well as a base for your shipping conditions.
Incoterms 2010 includes information about:
Incoterms 2010 includes information about:
• Who will pay the transport, insurance and other costs.
• To which place the shipment to take place.
• If loading and unloading included.
• When the risk passes from the seller to the buyer.
Information about claims, -limitation periods and the limitation amount.
Incoterms are based on four main groups with delivery terms and clauses in different ways regulates the above points. These four main groups E, F, C and D terms.
Frequently used delivery terms are
Ex Works, EXW freely sender stock
Frequently used delivery terms are
Ex Works, EXW freely sender stock
Free On Board FOB free on board given port (for shipping)
Free Carrier FCA free-handed carrier
Delivered At Place, DAP freely specified location (often the receiver) .
Delivered At Place, DAP freely specified location (often the receiver) .
Important to remember when choosing the delivery conditions
1. These terms are not always clear how the goods are to be packed, which is usually indicated only that the packaging be included. In groups E, F, C, it is therefore important to check that the goods are packed correctly to minimize the risk of damage during handling and transport.
2. When delivery specified in a contract, usually as a rule imply that the timing of the expected delivery refers to the specified delivery clause. A common mistake is that the buyer expects to have the goods home on the date specified as the delivery date when ordering. Used condition EXW is the receiver that is responsible for the collection and transportation and the delivery date is then when the goods are ready to be collected, not when the customer has the goods at home. So be clear about the delivery date is freely your warehouse or estimated arrival the customer's warehouse.
3. D terms (DAP, DAT, DDP) basically means that the seller has arranged transportation all the way to the buyer. Some differences occur regarding responsibility for customs clearance. These terms are perhaps from a köparperspektiv most comfortable, but the risk is that the buyer has to pay more than necessary, because the seller's shipping contracts can be bad, they put profit and sales toppings on shipping part.
4. I recommend you to be careful with the term DDP, for two reasons:
1) This term does not obligate the seller to unload the goods from incoming trucks. Which makes the Buyer responsible to provide (and pay for) forklift, derrick or crane to unload the cargo, unless otherwise agreed.
2) As a seller DDP (Delivered Duty Paid) means that you are responsible to pay duty and import VAT in the recipient country. In order to do that you need to be registered for VAT in the country of destination and pay possible duties levied to your goods when imported.
