REVIEWING THE TERMS: RESPONSIBILITIES OF EACH PARTY, POINT OF SHIPMENT TRANSFER, AND TRANSFER OF RISK
Now, let's define these Terms
EXW
Ex Works (Ex Factory or W/H)
The Consignor tenders the consignment for collection at own premise, which can be the production facility or warehouse. The Consignee is responsible for collecting the consignment from consignor’s premise, including loading onto trucks, customs clearances at origin and also shoulders all risk of bringing the consignment to the final destination.
FCA
Free Carrier
The Consignor can tender the consignment at own premise or deliver to either the carrier or another party duly nominated by the consignee at named place. Parties therefore need to be specific and clear regarding the delivery place, as this is the point where risk and all cost liabilities transfer to the Consignee.
CPT
Carriage Paid To
The Consignor is liable to pay for all shipping costs until delivery to named carrier at destination. Carrier choice is made by the consignor - but the delivery place is agreed to by both parties. Although carriage is paid to named carrier at destination, risk however transfers to consignee at the point at which the consignment is delivered over to the first carrier, at country of export.
CIP
Carriage & Insurance Paid To
This incoterm is similar to CPT, which means the Consignor has the same responsibilities as CPT, but here, they also have to arrange insurance cover on behalf of Consignee, even though risk transfer is still at delivery to first carrier at country of export. The 2020 revision of CIP, has more financial liability, than CIP 2010. CIP 2020 requires the Consignor to procure maximum marine insurance cover (i.e institute cargo clauses A).
DAP
Delivered At Place
Consignor is responsible for full cost and all activities involved in delivering the consignment to the consignee’s disposal at named place. The consignor does not have to unload the consignment, just has to ensure the transport arrived at named place of destination, so that Consignee can unload. All risk lies with the Consignor, until transfer at named place.
DPU
Delivered At Place Unloaded
DPU replaced the 2010 Incoterm called DAT - (Delivered At Terminal), and is similar to DAP, except with DPU, the consignor is responsible for unloading the consignment, after transport arrived at named place of destination. The Consignor is also still liable for all risk involved in shipping to, and unloading at named place of delivery.
DDP
Delivered Duty Paid
The consignor is responsible for all costs and activities pertaining to delivery of consignment to consignee’s disposal at named place of destination. Consignor arranges customs clearance at country of destination, but is not required to unload at place of destination. Like DPU, the Consignor shoulders all Risk until transfer point at named place of delivery.
For review of parties Insurance liability associated with above incoterms