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Incoterms Presenter: Host: Laurie Turnbull, CCLP Catherine Viglas, - PowerPoint PPT Presentation

May 16, 2023 •23 likes •343 views

Incoterms Presenter: Host: Laurie Turnbull, CCLP Catherine Viglas, CAE Supply Chain Consultant President & CEO Cole International CITT CITT Webinar Series Incoterms Disclaimer This material has been prepared for discussion purposes

  1. Incoterms Presenter: Host: Laurie Turnbull, CCLP Catherine Viglas, CAE Supply Chain Consultant President & CEO Cole International CITT CITT Webinar Series

  2. Incoterms Disclaimer This material has been prepared for discussion purposes only and is not intended as professional advice regarding selection of Incoterms or other issues affecting liability, obligations or responsibilities, of buyers and sellers regarding the international sale of goods. CITT Webinar Series 2

  3. Incoterms International Trade is Confusing! Who pays charges for? $ $ $ $ $ $ $ $ $ $ Seller Buyer $ $ $ $ $ $ $ $ $ $ Who bears risk of loss or damage? CITT Webinar Series 3

  4. Incoterms and International Trade Transfer Protection of cost from loss or and risk Incoterms damage Marine Insurance Choice of Transfer jurisdiction of title (law) and venue Contracts CISG Of Sale FOB Domestic freight term CITT Webinar Series 4-9

  5. Incoterms Shipping Terms of Sale FOB AFTD INCOTERMS UCC 1952-2004 1700s 1919-1985 1936 – 2010 (Including Marine (Including (Current ‘FOB’ Payment ‘FOB’ Version) Terms) Term Terms) CITT Webinar Series 5

  6. Incoterms - What are They? Incoterms were developed by the International Chamber of Commerce (ICC) in 1936 to: • Provide a set of standardized rules for interpreting commonly used terms in international trade • Eliminate misunderstandings, disputes, and litigation that can occur when buyers and sellers are unaware of different trading practices in foreign countries CITT Webinar Series 6

  7. Incoterms - What Do They Do? Incoterms provide information to the Buyer and Seller regarding: • The carriage of goods from Seller to Buyer • Export and import Customs clearance • The division of costs and risks • The obligations to give notice • The obligations to provide documentation CITT Webinar Series 7

  8. Incoterms • Three words that often cause confusion under Incoterms: Ownership • “Delivery” can • Risk of ownership occur in a (i.e. the need for • Incoterms foreign Port cargo insurance) exclude ownership Risk Delivery • These issues should be clarified in the Buyer and Seller’s “contract of sale” CITT Webinar Series 8

  9. Incoterms Buyer/Seller Contract of Sale Conditions Condition Jurisdiction Breach of of the sale Incoterm of the goods Payment Ownership contract / Venue May not all be covered in Purchase Order terms and conditions Which is why carriers should never recommend an Incoterm! CITT Webinar Series 9-5

  10. Incoterms • Incoterms are terms of the international contract of sale , not the contract of carriage • Incoterms were developed by the International Chamber of Commerce to assist Buyers and Sellers in international trade, they are not “law” • Incoterms 2010 consists of eleven terms for use in international trade… CITT Webinar Series 10

  11. Incoterms Incoterms 2010 can be sorted into two Multimodal Terms groups : EXW DAT 1. Those designed for FCA DAP multimodal shipping M CPT DDP ( i.e. any mode: CIP ocean, truck, rail, air ) and… Ocean Terms 2. Those designed only FAS CFR O for marine (ocean) FOB CIF shipping CITT Webinar Series 11

  12. Incoterms Incoterms 2010 “E” Terms (Buyer bears all costs & risks) • EXW - Ex Works (named place of delivery) M “F” Terms (Buyer pays “main freight”) • FCA - Free Carrier (named place of delivery) M • FAS - Free Alongside Ship (named port of O shipment) • FOB - Free On Board (named port of O shipment) CITT Webinar Series 12

  13. Incoterms Incoterms 2010 “C” Terms (Seller pays “main freight”) • CPT - Carriage Paid To (named place of destination) M • CIP - Carriage and Insurance Paid To (named place of destination) M • CFR - Cost and Freight (named port of destination) O • CIF - Cost, Insurance and Freight (named port of O destination) CITT Webinar Series 13

  14. Incoterms Incoterms 2010 “D” Terms (Seller bears all costs & risks): • DAT - Delivered at Terminal (named terminal at M port or place of destination) • DAP - Delivered at Place (named place of M destination) • DDP - Delivered Duty Paid (named place of M destination) CITT Webinar Series 14

  15. Incoterms 2010: Transfer of Costs (to the Buyer) [ Multimodal Terms ] [ Ocean Terms ] EXW FCA CPT CIP DAT DAP DDP FAS FOB CFR CIF Ex Works Free Carriage Paid Carriage, Delivered at Delivered at Delivered Free Free On Cost & Cost, Carrier To Insurance Terminal Place Duty Paid Alongside Board Freight Insurance & Paid To Ship Vessel Freight Services Multimodal C / Multimodal C / Multimodal C / Multimodal C / Multimodal C / Multimodal C / Multimodal Warehouse Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller storage Warehouse Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller labour Export Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller packing Loading Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller charges Inland Buyer/ Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller freight Seller Terminal Buyer Buyer Seller Seller Seller Seller Seller Seller Seller Seller Seller charges Forwarder’s Buyer Buyer Seller Seller Seller Seller Seller Buyer Seller Seller Seller fees Loading on Buyer Buyer Seller Seller Seller Seller Seller Buyer Seller Seller Seller vessel Ocean/air Buyer Buyer Seller Seller Seller Seller Seller Buyer Buyer Seller Seller freight Charges on arrival at Buyer Buyer Seller Seller Seller Buyer Seller Buyer Buyer Buyer Buyer destination Duty, taxes & customs Buyer Buyer Buyer Buyer Buyer Buyer Seller Buyer Buyer Buyer Buyer clearance Inland delivery to Buyer Buyer Buyer Buyer Buyer Buyer Seller Buyer Buyer Buyer Buyer destination 15 C = Recommended for containerized shipments

  16. Incoterms Incoterms 2010 7 Incoterms for Multimodal Shipments… CITT Webinar Series 16

  17. Incoterms EXW: Ex Works (named place of delivery) Multimodal Transfer of Cost and Risk to Buyer (i.e. Seller “delivers” ) Terms: EXW FCA CPT CIP Multimodal Term DAT DAP Port of Berlin Mississauga DDP Bremerhaven Export/Import Customs : Buyer’s obligation for export and import Freight Charges Buyer (from Seller’s dock) Insurance : Seller has no obligation to the Buyer to provide insurance Transfer of Risk : At Seller’s dock (Consider cargo insurance!) • This term should not be used if the Buyer is unable to arrange export customs clearance • Buyer’s obligation to load the goods (i.e. this term is intended for bulk shipments) • Not recommended for containerized shipments (use FCA) CITT Webinar Series 17-2

  18. Incoterms FCA: Free Carrier (named place of delivery) Multimodal Terms: Transfer of Cost and Risk to Buyer (i.e. Seller “delivers”) EXW FCA CPT CIP Multimodal Term DAT DAP DDP FORWARDER Export/Import Customs: Seller’s obligation for export/Buyer’s obligation for import Freight Charges : Buyer from the “named place” Insurance : Seller has no obligation to the Buyer to provide insurance Transfer of Risk: Upon delivery to the first carrier (Consider cargo insurance!) Recommended for containerized shipments CITT Webinar Series 18

  19. Incoterms CPT: Carriage Paid To (named place of destination ) Multimodal Terms: Transfer of Risk to Buyer Transfer of Cost to Buyer EXW (i.e. Seller “delivers”) FCA CPT CIP Multimodal Term DAT DAP DDP FORWARDER Export/Import Customs : Seller’s obligation for export /Buyer’s obligation for import Freight Charges : Seller to named place of destination Insurance : Seller has no obligation to the Buyer to provide insurance Transfer of Risk : Upon delivery to the first carrier (Consider cargo insurance!) Recommended for containerized shipments CITT Webinar Series 19

  20. Incoterms CIP: Carriage and Insurance Paid To (named place of destination) Multimodal Terms: Transfer of Risk to Buyer Transfer of Cost to Buyer EXW (i.e. Seller “delivers”) FCA CPT CIP Multimodal Term DAT DAP DDP FORWARDER Export/Import Customs : Seller’s obligation for export/Buyer’s obligation for import Freight Charges : Seller to named place of destination Insurance : Seller procures insurance for the Buyer (on “minimum cover”) Transfer of Risk : Upon delivery to the first carrier (Consider exclusions in the Seller-procured insurance policy!) Recommended for containerized shipments CITT Webinar Series 20

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