Changes to Delivery Terms Codes for 2010

The International Chamber of Commerce (ICC) have made changes to their Incoterms (International commercial terms). For Intrastat purposes Incoterms are referred to as Delivery Term. These changes saw the introduction of two new terms DAT (Delivered at Terminal) and DAP (Delivered at Place) which have replaced DAF (Delivered at Frontier), DES (Delivered Ex-ship), DEQ (Delivered Ex-quay) and DDU (Delivered Duty Un-paid).

Procedure during 2011

For Intrastat purposes, as well as accepting the two new Delivery Terms, DAT and DAP, we have continued to accept DAF, DEQ, DES and DDU on Intrastat declarations. New Changes

For Intrastat declarations with a reference period og January 2012 onwards businesses must use the new codes where DAF , DES, DEQ and DDU have previously been used:

• AT replaces DEQ
• DAP replaces DAF, DES and DDU

The new codes apply to any mode of transport. Under both new codes, delivery occurs at a named destination: in DAT, at the buyer’s disposal unloaded from the arriving vehicle; in DA, likewise at the buyer’s disposal but ready for unloading ( as under the former DAF, DES and DDU rules)

Terms

EXW – Ex Works (named place of delivery) The seller makes the goods available at its premises. This term places the maximum obligation on the buyer and minimum obligations on the seller. The Ex Works term is often used when making an initial quotation for the sale of goods without any costs included. EXW means that a seller has the goods ready for collection at his premises (works, factory, warehouse, plant) on the date agreed upon. The buyer pays all transportation costs and also bears the risks for bringing the goods to their final destination. The seller doesn’t load the goods on collecting vehicles and doesn’t clear them for export. If the seller does load the good, he does so at buyer’s risk and cost. If parties wish seller to be responsible for the loading of the goods on departure and to bear the risk and all costs of such loading, this must be made clear by adding explicit wording to this effect in the contract of sale.

FCA – Free Carrier (named place of delivery) The seller hands over the goods, cleared for export, into the disposal of the first carrier (named by the buyer) at the named place. The seller pays for carriage to the named point of delivery, and risk passes when the goods are handed over to the first carrier.

CPT - Carriage Paid To (named place of destination) The seller pays for carriage. Risk transfers to buyer upon handing goods over to the first carrier.

CIP – Carriage and Insurance Paid to (named place of destination) The containerized transport/multimodal equivalent of CIF. Seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier.

DAT – Delivered at Terminal (named terminal at port or place of destination) Seller pays for carriage to the terminal, except for costs related to import clearance, and assumes all risks up to the point that the goods are unloaded at the terminal.

DAP – Delivered at Place (named place of destination) Seller pays for carriage to the named place, except for costs related to import clearance, and assumes all risks prior to the point that the goods are ready for unloading by the buyer.

DDP – Delivered Duty Paid (named place of destination) Seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination including import duties and taxes. This term places the maximum obligations on the seller and minimum obligations on the buyer. Rules for Sea and Inland Waterway Transport The four rules defined by Incoterms 2010 for international trade where transportation is entirely conducted by water are:

FAS – Free Alongside Ship (named port of shipment) The seller must place the goods alongside the ship at the named port. The seller must clear the goods for export. Suitable only for maritime transport but NOT for multimodal sea transport in containers (see Incoterms 2010, ICC publication 715). This term is typically used for heavy-lift or bulk cargo.

FOB – Free on Board (named port of shipment) The seller must load the goods on board the vessel nominated by the buyer. Cost and risk are divided when the goods are actually on board of the vessel (this rule is new!). The seller must clear the goods for export. The term is applicable for maritime and inland waterway transport only but NOT for multimodal sea transport in containers (see Incoterms 2010, ICC publication 715). The buyer must instruct the seller the details of the vessel and the port where the goods are to be loaded, and there is no reference to, or provision for, the use of a carrier or forwarder. This term has been greatly misused over the last three decades ever since Incoterms 1980 explained that FCA should be used for container shipments.

CFR – Cost and Freight (named port of destination) Seller must pay the costs and freight to bring the goods to the port of destination. However, risk is transferred to the buyer once the goods are loaded on the vessel (this rule is new!). Maritime transport only and Insurance for the goods is NOT included. This term is formerly known as CNF (C& F).

CIF – Cost, Insurance and Freight (named port of destination) Exactly the same as CFR except that the seller must in addition procure and pay for the insurance. Maritime transport only.

Term in translation

The respective meaning of the terms FCL, LCL, CY, and CFS is as follows:

FCL versus LCL

The word carload relates to the rail car. The FCL and LCL are differentiated, in practice, on whether the ‘whole container’ or ‘not the whole container’ is intended for the consignee.

CY versus CFS

The CY and CFS apply to the manner and the location of the cargo delivery and receipt in a container service. The CY is the delivery (or receipt) of a whole container from (or at) the shipper’s or the forwarder’s (or the consignee’s) cargo yard or premises. The CFS is the delivery (or receipt) of loose cargo from (or at) the carrier’s container freight station.

The container freight station (CFS) is operated by the carrier for the receipt, forwarding, and assembling or disassembling of cargo. Normally, the container freight station is a customs clearance center.

Modes of CY and CFS Container Services

The CY/CY (read as ‘CY to CY’) container service—door-to-door container service or house-to-house container service—broadly means that the whole container received by the carrier is packed at the shipper’s or the forwarder’s premises, and the delivery of that same whole container to the consignee’s premises.