INCOTERM

TOPIC: COMPARE TERM E VÀ TERM D
I. Introduction:
* Incoterms stand for "International Commercial Terms" are published by The
International Chamber of Commerce (ICC). The new Incoterms 2020 that have
come into effect from the 1st of January 2020.
* In incoterms 2020 version, there are important differences in the terms "D"
(Delivery), compared to the 2010 version. DPU (Delivery at place and
unloading) in incoterms 2020 have been replaced the former DAT (Delivered
At Terminal) in incoterms 2010. The DAT rule limits delivery to a terminal, but
the DPU rule means that the destination can be any place, not just a terminal.
The 2020 version removes the reference to terminal to make it more general.
* Incoterms are analyzed in 3 aspects:
– Risk : where and when are the goods delivered? Where does the risk of goods
transfer from seller to buyer?
– Responsibility: who does what? Who organizes the transportation? Who buys
insurance for the goods? Who must get transport documents or take care of
export and import licenses, customs procedures, and security for goods;
– Costs : who bears what costs? For example, freight charges, packaging,
loading and unloading costs, inspection, security…
II. Term E - EX WORKS : The seller only places the goods ready at their
premises or another named place as specified in the contract, and the buyer is
responsible for all costs and risks of picking up the goods at the seller's location
and transporting it to the desired destination.
1. Responsibility: The seller fulfills its obligations when the goods are made
available for pickup at its premises. The buyer assumes all responsibility
thereafter.
2. Costs and Risks: The costs related to production, packaging and delivery
at the designated place belong to the Seller. And all costs and risks from
the point of delivery onwards belong to the buyer, specifically including:
+ Cost of loading and unloading goods at the seller's warehouse onto
the means of transport.
+ Unloading costs from seller's warehouse to export port.
+ Local charges for export, tax, export license.
+ International transportation rental costs.
+ License costs, taxes and fees at entry.
+ Transportation costs for import and Terminal handling charge
(THC).
3. Advantages and disadvantages:
- Advantages : optimal costs for sellers, risks and costs for seller.
- Disadvantages: The buyer must bear all shipping import and export costs,
which can be complicated for inexperienced buyers.
III. Term D:
1. Term D in Incoterms: including DAP (Delivered At Place), DDP (Delivered
Duty Paid), DPU (Delivered at Place Unloaded) which is replaced by DAT
(Delivered at Terminal). Mosts of term D can apply to all means of transport,
including road, rail, sea, air and multimodal transport.
* DAP (Delivered At Place): The seller is responsible for delivering the goods
to a named place agreed upon by both parties and bears all risks and costs
associated with delivering the goods to that specified place. About the buyer is
responsible for unloading the goods, paying any applicable import duties and
taxes, bearing any further costs and risks after the goods have been delivered to
the agreed-upon place.
* DPU (Delivered at Place Unloaded): The incoterm DPU is just the same as
DAP. The seller's responsibilities end once the goods are unloaded at the
designated place. From that point onward, the buyer assumes responsibility for
any further costs, risks, and arrangements associated with the goods, including
import clearance and onward transportation.
* DDP (Delivered Duty Paid): The seller delivers the goods when the goods
are placed at the disposal of the buyer, cleared for import on the arriving 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. They must clear the products not only for export but also for
import, to pay any duty for both export and import and to carry out all customs
formalities.
2. Advantages and disadvantages of term D:

- Advantages: Easier for the buyer because the seller is responsible for
shipping and customs clearance.
- Disadvantages: Can increase costs and risks for the seller, especially
when shipping internationally.
IV. Suggest application of term E or term D in specific issues:

Term E (Ex Works) is suitable when the buyer seeks maximum control and is
well-versed in logistics, while Term D (Delivered) is preferable for situations
where the seller's involvement in transportation and delivery is beneficial or
necessary for ensuring a smooth and reliable transaction.
- Term E (EXW) is suitable for buyers who are able and want to manage the
entire transportation process themselves, from picking up goods at the factory
until importing them into their country, especially when they have good ability
to logistics or have made arrangements with shipping companies.
- Term D (DAP, DDP, DPU) is suitable for buyers who want to minimize the
liability and risks associated with shipping and customs clearance, especially
when they do not have the experience or resources to manage these regulations.
this program.
V. Emphasize the importance of choosing the right terms in international

transactions:
In the context of international transactions, understanding and choosing the
right Incoterms terms not only helps optimize costs and risks for both the buyer
and seller but also ensures the success and efficiency of the transaction and
pandemic. The update from Incoterms 2010 to 2020 emphasizes this by making
the regulations clearer and better reflective of modern commercial realities,
especially in the adoption of digital technology and increased security,
confidential information.
VI. MINIGAME

INCOTERM

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TOPIC: COMPARE TERM E VÀ TERM D

2. Advantages and disadvantages of term D:

IV. Suggest application of term E or term D in specific issues:

V. Emphasize the importance of choosing the right terms in international

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