Space Ships Logistics
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Space Ships Logistics
Under Incoterms beginning with D there is no obligation to provide insurance, however the insurable risk is for the seller's account.
The risk and the cost is not always the same for Incoterms. In many cases, the risk and cost usually goes together but it is not always the case.
Rules for sea and inland waterway transport
Rules for any modes of transport
Ex Works (EXW) is the term used to describe the delivery of goods to
an available designation at their place of business, normally in their factory, offices or warehouse.
The seller does not need to then load items onto a truck or ship, and the remainder of the shipment
is the responsibility of the buyer (e.g. overseas shipment and customs duty).
EXW is therefore more favorable to the seller as they do not need to worry
about the freight once it has left their premises.
Unlike EXW, Free Carrier pushes the responsibility of delivering the goods to the buyers nominated premises onto the seller, so they have to organize shipping and various export documents.
"Carriage Paid To", or CPT, goes into a little more detail than FCA,
specifying that the seller bears the costs for transporting the goods to the nominated place that the buyer requests.
Carriage Paid To can be used in any transport mode, and the risk transfers from
the seller to the buyer as soon as the goods reach the nominated destination and the carrier takes charge of these.
"Carriage and Insurance Paid to", or CPI, specifies that the seller needs to pay the
costs of transport as well as the insurance cover for the goods in transit (by any transport mode)
to the destination named by the buyer.
The risk is then transferred from the seller onto the buyer once the goods reach the nominated point.
"Delivered at Terminal", or DAT, means that all of the costs up until the point of
delivery to a nominated terminal (e.g. a port or a quay) need to be covered.
The buyer would need to arrange Duties and Taxes and clearing goods through customs.
With DAT, the seller is also responsible for unloading the goods at the terminal.
It's advisable to ensure the terminal, hub or port is clearly specified, given the size of many terminals.
"Delivered at Place", or DAP, can also be used for any mode of transport.
An extension of DAT, the seller delivers the goods at a named destination, specified by the buyer,
although under the ICC rules, the unloading of the goods are the responsibility of the buyer.
The buyer is also required to sort out duties and taxes, as well as clearing the goods through customs.
"Delivered Duty Paid", or DDP, can be used for any mode of transport.
In this case, the seller is responsible for delivering the goods at a place specified by the buyer,
up to the point of unloading. Unlike DAP rules, the seller is also required to pay for all Duties and Taxes,
clear the goods for import and pay relevant taxes.
DDP is often complex as shipment of goods into a market are often best left
to local experts (e.g. the in-market buyer), so it's a less commonly used INCO Term.
"Free Alongside Ship", or FAS, is used in situations when the seller can
place the goods alongside other non-containerized goods (e.g. on a vessel or barge).
The seller might do this if they have access to sea or inland waterway routes and
want to place the goods en route to the buyer alongside other goods on the ship.
It's not recommended for goods that can be placed in a container (more on this below, see FCA).
The risk of transporting the goods 'alongside ship' move from the seller to the buyer
once the goods are delivered to a terminal or port and unloaded.
"Free On Board", or FOB, occurs when the seller delivers the goods to the port of shipment, at which then it becomes the responsibility of the buyer once unloaded onto a vessel. If the goods are damaged when on board the vessel, it's the responsibility of the buyer.
"Cost and Freight", or CFR, incurs more risk and responsibility onto the seller. The seller delivers the goods up and takes all responsibility and cost right up until the ship has docked at the end point and the goods have been unloaded.
"Cost, Insurance and Freight", also known as CIF, is also restricted to sea or inland waterway modes of transport. In this case, the seller insures the goods transported up until they arrive at the port, but it becomes the responsibility of the buyer (in terms of risk and insurance).