The general conditions of the Estonian Logistics & Freight Forwarding Association, the general conditions of road freight transport of the Estonian Logistics & Freight Forwarding Association, the general conditions of storage of the Estonian Logistics & Freight Forwarding Association and the Convention on the Contract for the International Carriage of Goods by Road (CMR), Incoterms/Combiterms 2020 (Incoterms®2010, too), as well as other legislative acts, are applicable to the provision of services.
The International Chamber of Commerce (ICC) has established international trade rules (Incoterms®), which are used as basic trade conditions regarding the sale of goods. Incoterms® is a great tool for setting out the duties and rights of parties regarding a sales and purchase contract. We always recommend that you agree on the delivery of goods prior to signing the contract.
These rules were first introduced in 1936 and the ICC has preserved and developed them. The latest version, also known as Incoterms® 2020, became valid on 1 January 2020, and henceforth every aspect is based on this.
We recommend that you use the delivery terms and conditions in accordance with the transport type set out below:
Maritime transport
FAS – Free Alongside Ship (…named port of shipment)
Designated loading port, used for maritime transport, the seller transports the goods to the port berth agreed with the buyer, the seller’s duties include customs clearance regarding export of goods.
FOB – Free On Board (…named port of shipment)
Designated loading port, used for maritime transport, the seller’s duties end when the goods are loaded onto the ship’s deck, the seller’s duties include customs clearance regarding export of goods.
CFR – Cost and Freight (…named port of destination)
Designated loading port at the destination, used for maritime transport, the seller’s duties end when the goods have been unloaded from the port berth at the destination port, the seller’s duties include customs clearance regarding export of goods and transport until the goods reach the destination port.
CIF – Cost, Insurance and Freight (…named port of destination)
Designated loading port at the destination, used for maritime transport, the seller’s duties end when the goods have been unloaded from the port berth at the destination port, the seller’s duties include customs clearance regarding export of goods and transport until the goods reach the destination port and the conclusion of an insurance contract in favour of the buyer.
Other forms of transport
EXW – Ex Works (…named place)
Designated loading place, used for all forms of transport, the seller makes goods available to the buyer at their own location or a different location, the seller’s duties do not include customs clearance regarding export of goods and loading the goods onto a lorry. The buyer bears all the risks and costs associated with or following the loading of goods from the place named by the seller.
FCA – Free Carrier (…named place)
Designated loading port, used for all forms of transport, the seller transports the goods to the location agreed with the buyer (transport company), the seller’s duties include customs clearance regarding export of goods. The seller is responsible for loading the goods onto the lorry if the designated loading place is at the seller’s location. If the designated loading place is at the transport company’s location, the seller is responsible for loading the goods onto the lorry but is not responsible for unloading the goods.
CPT – Carriage Paid To (…named place of destination)
Designed loading place at the destination, used for all forms of transport, the seller’s duties include arranging and paying for the transport to the destination as well as customs clearance regarding export of goods.
CIP – Carriage and Insurance Paid To (…named place of destination)
Designated loading place at the destination, used for all forms of transport, the seller’s duties include arranging and paying for transport to the destination, customs clearance regarding export of goods and the conclusion of an insurance contract in favour of the buyer.
DAP – Delivered at Place (…named place of destination)
Designated loading place at the destination, used for all forms of transport. The goods are deemed delivered by the seller once the buyer has received them via the incoming forms of transport and once the goods are ready to be unloaded at the designated destination. The seller bears all the risks associated with transporting the goods to the designated destination.
DPU – Delivered at Place Unloaded (…named place)
Designated loading port, used for all forms of transport, the seller agrees to transport the goods to the designated location and agrees to unload them. The seller covers all transport costs (export charges, transport, unloading from the primary carrier at the destination port and destination port costs); in addition, the seller bears all the risks until the goods reach the destination.
DDP – Delivered Duty Paid (…named place of destination)
Designated loading place at the destination, used for all forms of transport, the seller’s duties include arranging and paying for the transport up to the buyer’s location at the destination, but also customs clearance of imports (including state fees, licences). The buyer bears the unloading costs.
Incoterms®2020 changes compared with Incoterms®2010:
- FCA (Free Carrier) now offers the additional option to mark the loading on the shipping manifest prior to loading the goods onto the ship.
- The distribution of expenditure between the buyer and the seller is specified in more detail in Article A9/B9 of the Incoterms® rules.
- CIP (Carriage and Insurance Paid To) and CIF (Cost, Insurance and Freight) set out new insurance agreements. CIP now requires an insurance cover of ICC A or equivalent. Incoterms® 2010 had this aspect at the ICC C level. The requisite insurance cover based on the CIF will remain.
- Incoterms® rules FCA (Free Carrier), DAP (Delivered at Place), DPU (Delivered at Place Unloaded) and DDP (Delivered Duty Paid) now take into consideration the fact that goods can be transported without involving a third-party carrier, i.e. using your own forms of transport.
- The DAT (Delivered at Terminal) rule has been changed to the DPU (Delivered at Place Unloaded) rule in order to clarify that the destination can be any location, not just the ‘terminal’.
- Requirements regarding security, duties and responsibilities are the most highlighted aspects.
Table summarising the Incoterms®2020 rules.
Further information regarding Incoterms®2020 delivery terms and conditions is available on the International Chamber of Commerce website.