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Delıvery Methods Of External Trade

INCOTERMS 13 types of delivery methods of goods are specified by the declaration in 1990. It is possible to classify these methods in four sections based on the liability of the supplier. It is reduced from top to the below.

Section E

1.EXW (Ex-words): (Delivery at workplace) 
Supplier delivers the goods at the workplace that is belong to the supplier.

1.FCA (Free carrier): Delivery to carrier 
2.FAS (Free Alongside Ship):Delivery at the board of a ship.

3.FOB (Free On Board): Delivery on the deck of a ship.

Supplier delivers the goods to the carrier without paying basic transportation charge.

 

Section C nbsp;

1.CFR (Cost and Freight): The cost of goods and charges for frieght are paid  

2.CIF (Cost, Freigt and Insurance)

3.CPT (Freight Carriage Paid Top): Carriage rate is paid

4.CIP (Freight, Carriage and Insurance): Carriage rate and the cost of insurance are paid.

Section D

1.DAF (Delivered At Frontier) 

2.DES (Ex-ship): Delivery on a ship.

3.DEQ (Ex-quay): Delivery from the quay

4.DDU (Delivered Duty Unpaid): Customs duty is not paid before the delivery

5.DDP (Delivered Duty Unpaid): Customs duty is paid before the delivery

The methods included by this section imposes liabilities on the maximum level. The goods are delivered to the landing place.

EXW 

Liabilities of the supplier expires after lining up the goods for the buyer at the workplace (factory, workshop, depository) that is belong to the supplier. The supplier assumes obligations on the minimum level, using this method. Buyer assumes all of the risk and costs of transportation of the goods from the workplace of the supplier. However, this method can not be used if the buyer is not able to complete the outward process. In this situation, FCA method should be preffered.

FCA 

Free carrier term means; delivery obligations of the supplier expires delivering the goods to the carrier or adressee at the required place after completing the outward process. If the buyer doesn’t state any specific place to deliver, the supplier can choose one of the places that are agreed before. Currently, supplier can act inherently at buyer’s own expense and risk if the supplier’s help is required to contract the carry settlement.

FAS 

Delivery obligations of the supplier expires placing the goods at the quay or on a barge towards the ship without getting the goods through the customs at the port of embarkation. This term is able to be used only in water carriage. The outward process must be completed by the buyer. FAS term foresees the exportation of goods,namely customs exit procedures such as EXW to be completed by the buyer. This method can not be used if the buyer is not able to complete the outward process directly or indirectly.

FOB 

Delivery obligations of the supplier expires dispatching the goods alongside of the ship at the port. The buyer assumes all of the expenses and risks of any lose or damage after completing the dispatch. This term is able to be used only in water carriage. Dispatching the goods into the the ship means a serious amount of cost is assumed by the buyer. To use FCA term would be better if the board of the ship doesn’t have any practical value in the carrying process such as roll on/roll off and container traffic.

CFR 

This term is used in the meaning that required expenses and charges for freight for the goods which are objects of the process are paid buy the buyer.The supplier must get the goods through customs. After completing dispatching the goods into the ship, the buyer assumes all of the risks and extra expenses.This term is able to be used only in water carriage. To use CPT term would be better if the board of the ship doesn’t have any practical value in the carrying process such as roll on/roll off and container traffic.

CIF 

Supplier assumes the same obligations in CFR method and buy a marine insurance against the risk of lose or damage of the goods, as a plus. This insurance is on minimum level. This term is able to be used only in sea or river carriage. The supplier completes the outward process. The risks and the expenses after dispatching the goods into the ship are assumed by the buyer.

CPT 

The charges for the freight are paid by the supplier in the process of carrying the goods. The burden of all of the expenses and the risks are shifted to the buyer after the supplier delivers the goods to the first carrier. Carrier means a person or a company that assumes to carry goods using highway, seaway, airway, river line or a mix of them; in the terms of a carrying settlement. The supplier completes the outward process. This term can be used for any way of carriage.

CIP 

Buyer assumes to buy a carriage insurance against the risk of lose or damage of the goods on a minimum level. The supplier completes the outward process. This term can be used for any way of carriage

DAF 

Delivery obligation of the supplier expires lining up the goods and making them ready for the buyer at a place that is stated before, behind the border of the next country, after completing outward process. Border term can be used for any border included the border of the exported country. DAF term can be used for any way of carriage.

DES 

Delivery obligation of the supplier expires offering the goods which their outward process has not been completed, to the buyer, alongside of the ship. This term is used only for water carriage. After the goods arrives at the stated landing port, all of the risks and obligations shift to the buyer. Landing and getting goods through customs are on the responsibility of the buyer.

DEQ 

Delivery obligation of the supplier expires delivering goods that their process for getting through customs are completed, at the quay of the stated landing port. All of the expenses and risks including tax, duty and other costs before delivering the goods to the buyer are on the responsibility of the supplier. If the buyer is not able to import the goods directly or indirectly, this term can not be used. Dealing between parties on sharing some costs is possible. For example, in the situation that they agreed about buyer to pay the customs duty and complete outward process, “without paying customs duty” statement must be noted. This term is used only for water carrying.

DDU 

Delivery obligation of the supplier expires delivering goods to the buyer at the importing country. The supplier has to assume all of the risks and expenses (importing duty, tax and the other costs included) up to this stage, together with the costs for processes of getting through customs. Extra expenses and risks caused expiring the validating dates of the outward process are paid by the buyer. If parties deal between about payment of costs, this situation must be explained while contracting the statement. This term is able to be used for any way of carriage. .

DDP 

Delivery obligation of the supplier expires delivering goods to the buyer at the importing country and all of the expenses and costs are paid and processes are completed by the supplier. The supplier assumes liabilities on the maximum level, in term of this method. All of the risks and expenses are on the responsibility of the supplier. The only role of the buyer is to deliver the goods from the supplier. If the supplier is not able to take out the import license directly or indirectly, this term can not be used. This term can be used for any way of carriage.

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