Incolearn – Learning more about Incoterms 2000

DELIVERED EX SHIP (DES) PART V – Summary and Conclusion The Internati onal Chamber of Commerce (ICC) defines the tenth Incoterm, Delivered E x Ship (DES), at a named port of destination, as “the seller delivers when the goods are placed at the disposal of the buyer on board the ship not cleared for import at the named port of destination. The seller has to bear all the costs and risk involved in bringing the goods to the named port of destination before discharging. If the parties wish the seller to bear the costs and risks of discharging the goods, then the DEQ term should be used”. Previously we introduced DES and then considered what Professor Jan Ramsberg, the chairman of the ICC Working Party on Trade Terms, had to say about the ten obligations that the seller and buyer might need to fulfil in terms of DES. Based on the description of DES, it can only be used when the goods are delivered by sea or inland waterway or multimodal transport on a vessel in the port of destination. DES is the second of the five D-terms, also known as an arrival term, requiring the seller to hand over the goods to a nominated carrier free of risk and expense to the buyer. In summary, the seller’s primary duty is to contract for carriage, to deliver the goods on board the ship at the port of destination, to provide a document to enable the buyer to take delivery from the ship, and to arrange export clearance. The buyer’s primary duty is to take delivery of the goods from the ship at the port of destination, and to arrange import clearance. The documents required in terms of the contract of sale should be the commercial invoice, and the bill of lading or delivery order, while other documents will be those needed for the transit of the goods through any country or for import clearance. The three critical points of DEQ are firstly, that the seller must arrange the carriage. Secondly, that the risk transfers from the seller to the buyer when the goods are placed at the disposal of the buyer on board the ship, and thirdly, that the cost transfers from the seller to the buyer when the goods are placed at the disposal of the buyer on board the ship. Next week’s column will define the eleventh Incoterm – Delivered E x Quay (DEQ).