Incoterms® are primarily used for determining how the sale of equipment for delivery across international boundaries will be handled and who will pay for what in the transaction. They will not address the consequences of a breach of contract or exemptions of liability. Incoterms® relate to the terms between the exporter and importer.

Incoterms® cover the following broad points

Delivery – Incoterms® 2020 specify when seller delivers to buyer:

Risk – Incoterms® 2020 specify when risk transfers from seller to buyer. Risk passes from seller to buyer when seller has fulfilled his obligation to deliver the goods

Costs – Responsibility of costs passes from seller to buyer at a point up to which the seller is obliged to pay transport (and insurance) costs

The seller delivers when the goods, once unloaded are placed at the disposal of the buyer at a named place of destination.

The seller bears all risks involved in bringing the goods to and unloading them at the named place of destination.

Delivered at Place Unloaded (DPU) (formerly referred to as DAT for “Delivered at Terminal”) requires the seller to deliver the goods at the disposal of the buyer after they’ve been unloaded from the arriving means of transport.

DPU is the only Incoterms rule that requires the seller to unload goods at the place of destination.

DPU can apply to any—and more than one—mode of transport. The buyer and seller should specify and agree upon a named place of destination.

DPU requires the seller to clear goods for export, where applicable, without any obligation to clear the goods for import, pay import duty or carry out import customs formalities.

1. General: The seller must deliver the goods, commercial invoice, and any evidence of conformity.

2. Delivery: Deliver the goods at the disposal of the buyer, unloaded. On the agreed date or period.

3. Risks: All risk of loss/damage until goods have been delivered.

4. Carriage: Contract carriage of goods until the place of destination.

5. Insurance: No obligation.

6. Delivery/transport document: Provide documents that allow the buyer to take over the goods.

7. Export/Import clearance: All export clearance expenses (license, security, inspection, etc). Assist with import clearance

8. Checking: The seller must check, count, weight, mark, and package goods

9. Allocation of cost: Pay all the cost until delivery. Transport and loading. Unloading charges. Transit costs. Cost of delivery/transport document. Duties and taxes for export. All costs related to providing assistance in obtaining documents to the buyer.

10. Notices: Give the notice to receive the goods.

1. General: The buyer must pay the price of goods as agreed.

2. Taking Delivery: The buyer takes the goods at the destination point.

3. Risks: All risk of loss/damage from the time or end of the period agreed for delivery. If the buyer fails to clear import customs or notify time/period, the risk is under the buyer.

4. Carriage: No obligation to contract a carrier.

5. Insurance: No obligation to insure the goods.

6. Delivery/transport document: Accepts the proof of delivery

7. Export/Import clearance: Assist with export clearance. Pay for import clearance and formalities (licenses, security, official documentation).

8. Checking: No obligation.

9. Allocation of cost: Pay from the time goods delivered. All costs for assistance. Pay duties and taxes for imports. Any additional cost if does not notify the shipment date or period.

10. Notices: Time or period for receiving the goods and name the point of receiving the goods.

DPU Incoterm can be used for any mode of transport as well as for multimodal transport.

New Incoterm® DPU Replaces DAT.

The previous Incoterm® DAT (Delivered at Terminal) is now called DPU (Delivered at Place Unloaded. It was decided to change the term to DPU to remove confusion that arose in the past. In the past, DAT required ‘Delivery at Terminal (unloaded)’, however the word “terminal” caused confusion. The new term DPU (Delivery at Place Unloaded) covers ‘any place, whether covered or not’.

Buyer is responsible for import clearance and formalities (licenses, security, official documentation) including payment of duties and taxes if applicable unless otherwise agreed differently between seller and buyer.

Whilst there is no obligation for seller to insure the goods it is recommended that whilst under the seller’s responsibility and control that insurance cover is taken out.

The seller must be confident to arrange the unloading of goods at the named place.

Interested in learning more about Incoterms® 2020 Rules? Let us know at info@export.org.au