CIP (Carriage Insurance Paid To) In addition to the items addressed in the CTP rule, the CIP Incoterm also requires the seller to pay for insurance coverage for the goods in transit. Some companies choose to require insurance to cover 110% of the value of the goods. However, the seller and buyer can agree on the speci c amount of coverage for a shipment.
It is a good idea for shippers to regularly refresh their knowledge of Incoterms to ensure they are aware of all current changes. Here are the most current Incoterms and what they cover. EXW (Ex Works or Ex-Warehouse) When goods are sold, it is the seller's responsibility to package the goods and make them available to the buyer. The buyer is responsible for collecting the goods and all costs associated with shipping, exporting, and importing. The seller is no longer responsible for the goods once the buyer is made aware that they are ready for collection. FCA (Free Carrier) The seller is responsible for making the goods available at an agreed- upon location, such as a warehouse or shipping terminal. If the goods need to be moved before the international
shipment, the seller is responsible for arranging and paying for the transportation and for loading the goods onto the buyer’s chosen mode of transportation. The seller is also responsible for clearing the goods for export and paying any export charges. At this point, the buyer assumes responsibility for the goods and should provide a bill of lading to the seller once the goods are loaded for transportation.
DAP (Delivery at Place) This rule states that the seller is
CTP (Carriage Paid To) The seller is responsible for
responsible for delivering the goods to an agreed-upon location, bearing all costs for exporting and transporting the goods as well as the risks during transport until the goods are delivered to the destination the buyer selects. At this point, all responsibility transfers to the buyer including covering the costs and process of unloading the goods and paying all import duties, taxes, and customs clearance fees.
packing and transporting goods to the international carrier, covering customs and export costs, and paying for international shipping. While the seller pays for the international transport, responsibility for loss or damage transfers to the buyer once the goods have been delivered to the international carrier.
March 2023 • Inbound Logistics 47
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