Learning more about Incoterms®2010

According to the International Chamber of Commerce (ICC), the third of the Incoterms – Carriage Paid To (CPT), at a named place of destination – means that “the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such place is agreed by the parties) and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination”. The ICC’s Incoterms ®2010 identifies ten obligations that the buyer may need to fulfil in terms of Ex Works: (1) general obligations of the buyer; (2) licences, authorisations, security clearances and other formalities; (3) contract of carriage and insurance; (4) taking delivery; (5) transfer of risks; (6) allocation of costs; (7) notices to the seller; (8) proof of delivery; (9) inspection of goods; and (10) assistance with information and related costs. The general obligations of the buyer are that he must pay the price of the goods in conformity with the contract of sale. In respect of the licences, authorisations, security clearances and formalities, the buyer must obtain these at his own risk and expense and also account for all customs formalities for the import of the goods and for their transport through any country. The buyer has no obligation with respect to the contract of carriage or the contract of insurance. In order to effect delivery the buyer must take delivery of the goods when they are delivered, and receive them at the named place of destination. Once the goods have been delivered the buyer bears all the risks of loss or damage to the goods. As for the allocation of costs, the buyer must pay all costs relating to the goods from the time that they are delivered, all costs relating to the goods while in transit until their arrival at the agreed place of destination, unloading costs (unless these are for the seller’s account), any additional costs, and where applicable the costs for customs formalities. The buyer, where applicable, must give the seller sufficient notice of the named place of destination of the goods. The buyer must accept the transport document. Any mandatory pre-shipment inspection costs are for the buyer’s account. The buyer must inform the seller of any security information requirements and reimburse the seller for costs incurred in providing or rendering assistance to obtain documentation and information. In next week’s issue we will provide a summary of Carriage Paid To (CPT) term.