11 Incoterms 2020 Latest Version

1. General overview

• Incoterms is a type of document/set of rules issued by the International Chamber of Commerce (ICC) to explain international trade conditions related to goods delivery issues. The methods take place between the seller and the buyer according to the contract of sale, with the agreement and contract between the two parties.
• Role of Incoterms :
• Becoming the language of international commerce.
• Become the foundation of international trade.
• Promote the development of international trade .
• Promote the process of negotiation and conclusion of contracts.

2. Content of Incoterms 2020 commercial conditions

Group of multimodal transport conditions:

2.1 EXW (Ex work) – Delivery at the factory

• How to specify : EXW specified location. For example: EXW Toyota Vietnam, Vinh Phuc, Vietnam – Incoterms 2020.
• Overview : Risk of goods will be transferred from the seller to the buyer, calculated from the time of delivery to the buyer right at the factory location of that business.
• Main obligations of the seller:
• Provide goods according to invoices and documents, in paper or electronic form.
• Check markings , packaging and product characteristics .
• Delivery has not yet been delivered to the buyer's pvt.
• Risks transfer from the time of delivery or earlier.
• Bear all costs until completion of delivery.
• Notify buyers of information including : transportation security information, insurance information , export customs clearance information support...
• Main obligations of the buyer:
• Pay and accept documents and invoices that the seller has
• Sign a transport contract and pay freight to transport goods.
• Receive ; risk transfer when the seller completes delivery or possibly
• Provide complete proof of receipt of goods to the seller.
• bear all costs from the time the seller completes the delivery obligation. Bear the costs that the seller supports.
• Export and import customs clearance (if any).
• Notify the seller about the time, location of receipt of goods, means of transport...

2.2 FCA (Free Carrier) – Delivery to the first carrier

• Regulation method : FCA specified delivery location. For example: FCA Noi Bai Airport, Vietnam – Incoterms 2020.
• Overview : The seller fulfills its delivery obligation after delivering the goods to the buyer, via the carrier at the location designated by the buyer.
• Main obligations of the seller:
• Deliver the goods to the named carrier, at the named location within the seller 's country. Transfer of risk at the time of delivery or earlier.
• Load the goods onto the buyer's means of transport, if the delivery location is at his premises or deliver the goods to the carrier on the arriving means of transport not yet unloaded . This will apply if delivered at a location other than your premises.
• Ensure transportation security at the delivery location.
• If there is an agreement, the seller signs a contract of sale under normal conditions.
• full documentation of normal delivery, to assist the buyer in obtaining transport documents or transport documents noting that the goods have been loaded (On board BL).
• Inform buyers about delivery status, insurance information, transportation security,...
• Bear all costs until completion of the delivery process , costs of providing normal delivery documents, buyer support costs , export taxes and fees.
• Customs clearance for export of goods .

- Main obligations of the buyer:

• Sign a transport contract and pay the freight.
• Inform the seller specifically about the time, delivery location, mode of transport, carrier and other transport security requirements .
• Receiving goods and risks from the time the seller completes the delivery.
• Accept proof of delivery. Or request the carrier to issue to the seller a transport document noting that the goods have been unloaded .
• Import customs clearance.
• Bear the costs from the moment the seller completes the delivery; import taxes and fees ; transit; seller support costs ; Expenses incurred due to notification errors or the carrier's inability to receive the goods.

2.3 CPT (Carriage Paid To) – Carriage paid to destination

- How to specify : CPT specified destination location. For example, CPT Noibai Airport, Vietnam – Incoterms 2020.

- Overview : The seller fulfills his delivery obligation as soon as he delivers it to the carrier he hires. This is done at the location, which is specified in the seller's country.

- Main obligations of the seller:

• Sign the Transport Contract (Regular contract, usual route and method of transport, suitable to the nature of the goods). Follow the correct order according to transportation security requirements to the destination.
• Delivery, transfer of risk.
• Notify buyers of delivery status, insurance information, transportation security, ...
• At the request of the buyer, provide all common transport documents, issued within the specified delivery period . This to help buyers receive goods or sell goods on the journey.
• Export customs clearance.
• Pay freight, costs for providing proof of normal delivery, transportation security, export taxes and fees. Pay costs related to transshipment, unloading and transit costs if specified in the Transport Contract.
• Main obligations of the buyer:
• Receive goods, bear shipping risk.
• Bear all costs after the seller completes delivery; transportation costs as well as unloading costs at destination if these costs are not included in the transport contract; import tax and fees; Seller's help costs...
• Inform the seller of the time and location of receiving the goods at the destination if agreed upon.
• Import customs clearance.

2.4 CIP (Carriage and Insurance Paid To) – Freight paid to destination & insurance

- Specified way: CIP specified destination location. For example, CIP Noibai airport, Vietnam – Incoterms 2020.

- Overview: This condition is completely similar to CPT , but the only difference is that the seller has an additional obligation to buy insurance for the goods.

- Obligation to buy insurance: Insurance A (London Institute of Underwriters) or equivalent; Reputable company; Minimum value 110% of contract value; Buy with contract currency; Transferable insurance documents ; Valid on the entire journey.

2.5 DAP (Delivered at Place) – Delivered at destination

- Regulation: DAP Garment Company 10, Duc Giang, Gia Lam, Hanoi, VN, Incoterms 2020

- General: The seller completes delivery when he places the goods at the buyer's disposal on PTVT not yet occupied , but still available for unloading at the named place of destination.

- Seller obligations:

• Customs clearance for export and transit.
• Sign the transport contract, implement transport security requirements to the destination .
• Provide delivery documents , if required by the buyer to receive the goods.
• Pay freight, costs for providing proof of delivery, transportation security, export taxes and transit fees. Pay unloading costs if specified in the Transport Contract.
• Delivery and risk transfer at destination.
• Notify the buyer to receive the goods .
• Buyer obligations:
• Notify delivery time and location.
• Import customs clearance.
• Receive goods, accept moving risks.
• Unload goods, pay unloading fees if not specified in the Transport Contract.

2.6 DPU (Delivered at Place Unloaded) – Delivered at the destination that has not been unloaded from the means of transport

- Regulation: DPU Garment Company 10, Duc Giang, Gia Lam, Hanoi, VN, Incoterms 2020

- General: The seller completes delivery when the goods are placed, at the buyer's request , in unloaded condition at the named place of destination.

- Seller obligations:

• Customs clearance for export and transit.
• Sign the transport contract and comply with transportation security requirements to the destination.
• Unloading, delivery, risk transfer at destination.
• Provide any delivery documents required by the buyer to receive the goods.
• Pay freight, costs for providing proof of delivery, transit, transportation security, export taxes and fees.
• Notify the buyer to receive the goods.

- Buyer obligations:

• Notify delivery time and location.
• Receive goods, accept moving risks.
• Import customs clearance.

2.7 DDP (Delivered Duty Paid) – Delivered tax paid

- Regulation: DDP Garment Company 10, Duc Giang, Gia Lam, Hanoi, VN, Incoterms 2020.

- Overview: The seller completes delivery when he orders the goods cleared for import, at the buyer's discretion . In an unloaded condition but ready for unloading, at the named place of destination.

- Seller obligations:

• Customs clearance for import, export, and transit.
• Sign the transport contract and comply with transportation security requirements to the destination.
• Provide any delivery documents to the buyer to receive the goods.
• Delivery, risk transfer at destination.
• Pay freight, costs of providing proof of delivery, import and export taxes, transportation security, transit, and unloading fees if under the Transport Council.
• Notify the buyer to receive the goods.

- Main obligations of the buyer:

• Notify delivery time and location.
• Receive goods, bear shipping risk.
• Unload goods, pay unloading fees if not specified in the Transport Contract.

The group of conditions applies only to sea transport

2.8 FAS (Free Alongside Ship) – Delivery alongside the ship

- Regulation method: FAS specified port of loading. For example: Hai Phong port FAS, Vietnam – Incoterms 2020

- Overview: The seller fulfills his delivery obligation, after placing the goods alongside the ship , designated by the buyer immediately at the loading location at the loading port.

- Main obligations of the seller:

• Export customs clearance.
• Vessels can be chartered under normal conditions if agreed upon.
• Delivery along the ship's side. Risk passes at the time of delivery or earlier.
• Notify buyers about delivery status, transportation security, insurance information...
• Implement transportation security requirements until delivery.
• Provide standard delivery documents, or help the buyer obtain transport documents.
• Bear the costs until completion of delivery, export taxes, buyer's support costs , and costs of providing normal delivery documents.

- Main obligations of the buyer:

• Sign a boat charter contract and pay the freight.
• Inform the seller about delivery time, location, transport vessel and other transport security requirements .
• Delivery is at risk from the time the seller completes the delivery process .
• Import customs clearance.
• Accept proof of delivery provided by the seller.
• Bear the costs from the moment the seller completes the delivery; import taxes and transit fees; seller's help costs; Expenses incurred due to notification errors or delayed shipping or failure to receive goods.

2.9 FOB (Free On Board) – Delivery on board the ship

- Specified way: FOB specified port of loading. For example: Hai Phong port FAS, Vietnam – Incoterms 2020.

- Overview: The seller fulfills its delivery obligation, immediately after placing the order on the vessel designated by the buyer at the loading location at the port of loading.

- Main obligations of the seller:

• Export customs clearance.
• Vessels can be chartered under normal conditions if agreed upon.
• Inform buyers about delivery status, transportation security, insurance information ...
• Delivery on board, risk passes at the time of delivery or earlier.
• Implement transportation security requirements until delivery.
• Bear the costs until completion of delivery, costs of providing normal delivery documents, export taxes and fees, and buyer support costs.
• Provide standard delivery documents, or help the buyer obtain transport documents.

- Main obligations of the buyer:

• Sign a boat charter contract and pay the freight.
• Inform the seller about delivery time, location, transport vessel and transport security requirements.
• Delivery is at risk from the time the seller completes the delivery process .
• Import customs clearance.
• Bear the costs from the moment the seller completes the delivery; import taxes and transit fees; seller's help costs; Expenses incurred due to notification errors or delayed shipping or failure to receive goods.
• Accept proof of delivery provided by the seller.

2.10 CFR (Cost and Freight) – Sea freight & freight

• Specified way: CFR specified destination port. For example: CFR Hai Phong port, Vietnam – Incoterms 2020
• Overview: The seller fulfills his delivery obligation once he has delivered the goods on board the vessel at the port of loading.

- Main obligations of the seller:

• Sign a charter contract (regular contract, usual route and method of transport, appropriate to the nature of the goods). Fulfill transportation security requirements to destination.
• Delivery, transfer of risk.
• Export customs clearance.
• Notify buyers of delivery status, insurance information...
• Providing a complete set of common transport documents issued within the specified delivery period, helping the buyer receive goods or sell goods on the journey.
• Pay freight, costs of providing proof of normal delivery, transportation security, export taxes and fees. Pay costs related to transshipment, transit, and unloading costs if specified in the Transport Contract.

- Main obligations of the buyer:

• Receive goods on board the port of loading, bear the shipping risk. Receive goods at the port of discharge from the carrier.
• Inform the seller of the time and location of receiving goods at the port of destination if agreed upon.
• Bear all costs after the seller completes delivery; Costs on the transportation route as well as costs of unloading, unloading, etc. at the destination if these costs are not included in the transport contract; import tax and fees; Seller's help costs...
• Import customs clearance.

2.11 CIF (Cost Insurance Freight) – Sea freight, insurance & freight

- Specified way: CIF specified port of destination. For example: CIF Hai Phong port, Vietnam – Incoterms 2020.

- Overview: Similar in nature to CFR, the only difference is that the CIF seller has an additional obligation to purchase insurance for the goods and provide insurance documents to the buyer (similar to CIP, only the insurance level is different). minimal risk C).

3. Conclusion

Above are articles clarifying the 11 Incoterms 2020 conditions. The article is based on the practical experiences of DOLPHIN Company. Besides, to update better articles about information about import and export or ship freight rates; train schedule. Customers can follow the fanpage to be updated with the latest articles.

If you have any questions or comments, please contact our DOLPHIN Company hotline or email according to the information below:

• DOLPHIN SEA AIR SERVICES CORPORATION
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