Ex Works (EXW)
In case of Ex Works (EXW), all responsibilities are assigned to the buyer. The seller has the responsibility to make the goods available at a designated place and time. This location must be agreed upon in the terms of delivery. In most cases, this will be a warehouse or factory owned by the seller. All risks and costs related to the transport are assigned to the buyer. This includes the loading of the goods at the designated place.
It is good to know that the buyer also arranges customs in this case. When it comes to transports outside of Europe, this often causes problems. Since Brexit, this also relates to transports to and from the UK and England. Therefore, when you do business with the UK you usually won’t use EXW. EXW is not recommended for international transports.
Free Carrier (FCA)
FCA means freigt-free to carrier. In this case, the transporter ships the goods to an agreed upon place of delivery. The risks of the shipping transfer to the buyer when the goods are delivered to the first carrier.
Within FCA, a delivery can happen two ways. This does not have to be mentioned in the contract:
If the agreed point of delivery is the factory or the office of the seller, the risk of transportation transfers when the goods are loaded on the vehicle of the buyer.
When the point of delivery is elsewhere, the risks transfers once the goods are made available to the buyer and ready for unloading.
After the delivery, the buyer carries the risks and costs of the transport. An important difference with EXW is that the seller is responsible for customs related to the export of the goods. All customs related to transit and import are arranged by the buyer.
Carriage Paid To (CPT)
With CPT, the seller takes care of the transport and costs until a agreed upon point of delivery. The risks of the transport are transferred to the buyer in an earlier stadium, being when the goods are delivered to the first carrier. The transfer of costs and risks do not happen at the same time. All costs and responsibilities related to the customs related to the export and transit of the goods are assigned to the seller. The buyer arranges all customs related to the import of the goods. If the terminal charges Terminal Handling Charges (THC), the buyer should ask the seller if these costs are calculated within the transport price.
Carriage and Insurance Paid To (CIP)
In case of CIP, the seller takes care of the transport and transport costs until a agreed upon point of delivery. The risks of the transport are transferred to the buyer in an earlier stadium, being when the goods are delivered to the first carrier. The transfer of costs and risks do not happen at the same time. All costs and responsibilities related to the customs related to the export and transit of the goods are assigned to the seller. The buyer arranges all customs related to the import of the goods. If the terminal charges Terminal Handling Charges (THC), the buyer should ask the seller if these costs are calculated within the transport price.
The difference with CPT, which is described above, is that the seller is obliged to take out a goods transport insurance for the buyer’s goods. If this insurance is not enough to cover the costs of the damages, the buyer will have to cover the extra costs.
Delivered at Place Unloaded (DPU)
DPU assigns the responsibility for risks and costs to the seller until the agreed upon point of delivery. The seller will have to unload the goods for the buyer. All costs and responsibilities related to the customs related to the export and transit of the goods are assigned to the seller. The buyer arranges all customs related to the import of the goods.
Delivered At Place (DAP)
DPU assigns the responsibility for risks and costs to the seller until the agreed upon point of delivery. The seller will have to offer the goods to the buyer, but he is not obliged to unload them. This is the difference with DPU, as described above. All costs and responsibilities related to the customs related to the export and transit of the goods are assigned to the seller. The buyer arranges all customs related to the import of the goods.
Delivered Duty Paid (DDP)
DDP assigns the responsibility for risks and costs to the seller until the agreed upon point of delivery. The seller will have to offer the goods to the buyer, but he is not obliged to unload them. This is the same as DAP. The difference is in arranging the customs. All costs and responsibilities related to the customs.