BUSINESS
ITT Exercises - Freight Transportation.pdf

The seller must obtain at his own expense cargo

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named port of destination. The seller must obtain, at his own expense, cargo insurance complying at least with the minimum cover. FCA (Free Carrier): “F CA ” means that the seller delivers the goods to the carrier or another person nominated by the buyer at the selle r’s premises or another named place. The parties are well advised to specify as clearly as possible the point within the named place of delivery, as the risk passes to the buyer at that point. If the parties intend to deliver the goods at the seller’s pr emises, they should identify the address of those premises as the named place of delivery. If, on the other hand, the parties intend the goods to be delivered at another place, they must identify a different specific place of delivery. DDP (Delivered Duty Paid): “D DP ” means that the seller delivers the goods when the goods are placed at the disposal of the buyer, cleared of import on the arriving
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Answers Terms of Trade Page | 195 2017 means of transport ready for unloading at the named place of destination. The seller bears all the costs and risks involved in bringing the goods to the place of destination and has an obligation to clear the goods not only for export but also for import, to pay any duty for both export and import and to carry out all customs formalities. DDP represents the maximum obligation for the seller. CPT (Carriage Paid To): “C PT “ 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 between 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. When CPT, CIP, CFR, or CIF are used, the seller fulfils their obligation to deliver when it hands the goods over to the carrier and not when the goods reach the place of destination. CFR (Cost and Freight): “CFR” means that the seller delivers the goods on board the vessel or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the vessel. The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination. FOB (Free On Board): “F OB ” means that the seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the vessel, and the buyer bears all costs from that moment onwards. FAS (Free Alongside Ship): “F AS ” means that the seller delivers when the goods are placed alongside the vessel (e.g., on a quay or a barge) nominated by the buyer at the named port of shipment. The risk of loss of or damage to the goods passes when the goods are alongside the ship, and the buyer bears all costs from that moment onwards.
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Answers Terms of Trade Page | 196 2017 Exercise 6.2 (Answer) 1. For the following three Incoterms ® 2010, name the party that bears the COST for the listed stages of a shipment:
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  • Fall '18
  • Jane Smith
  • freight forwarder, Commercial item transport and distribution, CIFFA, Ocean Transportation Intermediary

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