Explore the importance of Incoterms in international trade and their impact on the European logistics market. Incoterms is an international standard on the rights and obligations of the buyer and seller in the international transportation of goods.
Incoterms, or International Commercial Terms, play a crucial role in defining the responsibilities and liabilities of buyers and sellers in global trade. In the European logistics market, understanding and correctly applying Incoterms is essential for seamless and cost-effective international transactions. These terms, including EXW, FOB, CIF and DAP, govern everything from the point of origin to the final destination of the goods. For example, EXW and FOB give buyers more control over the transportation process, while other terms imply that sellers take charge. Interestingly, CIF prices are often quoted initially, but there is flexibility to offer prices based on different terms. Neele-Vat, with its extensive experience in international logistics, recommends choosing EXW or FOB, allowing maximum control while using our expertise to manage transportation to your specified destination. We will elaborate on each Incoterm and offer valuable insights for navigating the European logistics landscape.
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DDP - Delivered duty paid (agreed place of destination)
Under the ICC Incoterms® Delivered Duty Paid (DDP) rule, the seller bears maximum responsibility while the buyer has minimum obligations. The seller is charged with delivering the goods to the designated location in the buyer's country. In addition to the cost of clearing the goods, the seller also assumes the cost of customs clearance in the buyer's country. In addition, the seller must pay all required import duties, including any local taxes such as VAT or excise duty.
DDP is a delivery condition suitable for all forms of transportation.
Characteristics:
Delivery: The seller must place the goods unloaded on the arriving means of transport at the agreed destination at the disposal of the buyer or any other person designated by the buyer.
Transport risk: The risk of damage to or loss of the goods during transport shall be borne by the seller until delivery on the means of transport at the agreed destination.
Transportation costs: The cost of transportation to the agreed destination shall be borne by the seller.
Customs Formalities: The seller must take care of all customs formalities associated with export, transit and import to the agreed destination. For his account are also the costs thereof, and the duties, taxes and charges related thereto.
Transportation Insurance: Neither party is required to obtain insurance for the goods.
Specification place of delivery: This delivery condition should always add where the transfer of the goods takes place. With DDP, this is indicated by: ... agreed place of destination (... named place of destination).
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