How are ship buyers paid

What are Incoterms?

"Incoterms" is the abbreviation for "International Commercial Terms". They were first introduced in 1936 and consist of eleven rules that clearly define who is responsible for what in international trade.

Why are they so important?

Because they are accepted everywhere from Augsburg to Zabol. They are required on every commercial invoice and reduce the risk of costly misunderstandings.

What are they for?

Incoterms set out all tasks, risks and costs that arise during the exchange of goods between buyer and seller.

The three most common Incoterms

  • The buyer bears almost all costs and risks during shipping
  • The seller just needs to ensure that the buyer has access to the goods
  • As soon as access is guaranteed, all remaining tasks (including loading) must be organized by the buyer

Transfer of risk from seller to buyer:

At the seller's warehouse / office or where the goods are to be picked up

DAP - Delivered At Place

  • The seller assumes the costs and risks involved in transporting goods to an agreed address
  • Goods are considered delivered as soon as they have arrived at the address and are ready to be unloaded
  • The responsibility for export and import is the same as for DAT

Transfer of risk from seller to buyer:

As soon as the goods are at the agreed address and ready to be unloaded

DDP - Delivered Duty Paid (free duty paid)

  • Seller takes almost all responsibility during shipping
  • He assumes all costs and risks that arise when transporting goods to an agreed address
  • The seller also ensures that the goods are ready for unloading, that import and export obligations have been met, and pays applicable customs duties

Transfer of risk from seller to buyer:

As soon as the goods are at the agreed address and ready to be unloaded.

CIP - Carriage And Insurance Paid To

  • The seller bears the same responsibility as with CPT, but with one difference: the seller pays for delivery and insurance to the specified destination.
  • According to Clause A of the Institute Cargo, the seller is obliged to take out the maximum insurance coverage for the buyer's risk.

Transfer of risk from seller to buyer:

As soon as the buyer's carrier receives the goods