Export delivery terms refer to trade terms agreed upon between the seller and the buyer, outlining the transfer and transportation responsibilities of goods. These terms are defined by the International Chamber of Commerce (ICC) and are commonly known as Incoterms rules. Here are some commonly used export delivery terms and key considerations:
EXW (Ex Works):
- The seller prepares the goods at a specified location (usually their own facility), and the buyer assumes the transportation costs and risks. The buyer is responsible for picking up the goods from the seller's location.
FCA (Free Carrier):
- The seller delivers the goods to a specified carrier at an agreed-upon location. The carrier then takes possession of the goods and delivers them to the buyer. The seller covers the transportation costs.
CPT (Carriage Paid To):
- The seller transports the goods to a specified destination, and the buyer takes delivery. However, the buyer is responsible for transportation costs beyond the agreed-upon destination.
CIP (Carriage and Insurance Paid To):
- Similar to CPT, the seller transports the goods to a specified destination, insures them, and delivers them to the buyer. The buyer is responsible for transportation costs beyond the agreed-upon destination.
DAP (Delivered at Place):
- The seller transports the goods to a specified location and delivers them to the buyer. The seller covers transportation costs and risks, but the buyer is responsible for customs duties and expenses at the destination.
DPU (Delivered at Place Unloaded):
- The seller unloads the goods at a specified location and delivers them to the buyer. The seller covers transportation costs and risks, but the buyer is responsible for customs duties and expenses at the destination.
Key Considerations:
Insurance:
- Adequate insurance should be arranged to cover potential losses during transportation.
Customs Procedures:
- Relevant customs procedures and tax payments should be predetermined and agreed upon.
Payment Terms:
- Payment terms in export transactions should be defined and arranged to satisfy both parties.
Communication and Cultural Differences:
- Effective communication between exporting and importing parties is crucial. Cultural differences should be acknowledged and respected.
It's important to clearly define export delivery terms and details in advance. The use of the appropriate Incoterms rule and a well-drafted agreement ensures that both parties understand their rights and responsibilities clearly.
