InTents June/July 2022 - 40

business | tips and techniques
loaded on board the vessel. The risk of
loss of or damage to the goods passes
when the goods are on board the vessel,
but the seller must still contract
for and pay the costs of the transportation
necessary to deliver the goods
to the agreed destination as well as the
associated insurance.
The seemingly
straightforward nature
of the shipping process
can result in dangerous
complacency.
* Carriage paid to (CPT): The seller
delivers the goods to the carrier or another
party named by the seller at an
agreed place, if any such place is agreed
between parties. The seller must contract
for and pay the cost of carriage
necessary to bring the goods to the
named place of destination.
* Carriage and insurance paid to
(CIP): The seller delivers the goods to
the carrier or another person named
by the seller at an agreed place, if any
such place is agreed between parties,
and the seller must contract for and
pay the costs of carriage necessary
to bring the goods to the agreed upon
destination. The seller also contracts
for insurance to cover against risk of
loss of or damage to the goods during
transportation. The buyer should note
that, under CIP, the seller is required
to obtain only the minimum prescribed
levels and types of insurance.
If the buyer seeks greater or broader
protection(s), the buyer will need either
to expressly agree on that with
the seller or arrange for its own additional
insurance.
* Delivered at place (DAP): The seller
is deemed to have completed delivery
when the goods are placed at the disposal
of the buyer on the arriving means
of transport ready for unloading at the
agreed upon destination. The seller
bears all risks involved in transporting
the goods to the delivery destination.
* Delivered at place unloaded (DPU):
The seller is deemed to have completed
delivery when the goods, once
unloaded, are placed at the disposal of
40 intents june-july 2022
the buyer at the agreed destination. The
seller bears all risks associated with
transportation as well as unloading of
the goods at the destination.
* Delivered duty paid (DDP): The seller
is deemed to have completed delivery
when the goods are placed at the
disposal of the buyer, cleared for import,
and ready for unloading at the agreed
destination. The seller bears all costs
and risk of loss involved in transporting
the goods to the destination and must
also clear the goods for export from
the export country, clear the goods
for import at the destination, pay all
export/import duties and satisfy all
customs formalities.
Negotiating Incoterms
Whether and how vigorously a buyer
or seller should negotiate shipping and
delivery terms depends largely on how the
equipment will be shipped and which party
customarily shoulders the associated risks.
EXW places virtually all of the risk on the
buyer, which is more than a little unusual
within the context of an equipment sale,
particularly if the equipment is coming
from overseas. So, negotiating more
favorable terms is probably not only
possible but necessary. Fortunately, by
utilizing Incoterms, you can make this as
simple as changing EXW to DDP (name
your delivery point) destination.
Domestic and international use
As originally conceived, Incoterms were
intended to apply internationally, but they
are commonly used for stateside transportation
of goods because, as discussed
above, they are so well understood in the
transportation industry. As valuable as
they are domestically, however, they can
be crucial with respect to a wide array of
issues internationally. Without attempting
to cover all of them, consider what in
our view constitute the three most common,
and often most important, issues:

InTents June/July 2022

Table of Contents for the Digital Edition of InTents June/July 2022

InTents June/July 2022 - Cover1
InTents June/July 2022 - Cover2
InTents June/July 2022 - 1
InTents June/July 2022 - 2
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InTents June/July 2022 - Cover3
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InTents June/July 2022 - Expo22_Broch1
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