This international commercial standard established by the International Chamber of Commerce governs the division of responsibilities, costs, and risks between a seller and a buyer. Under these terms, the seller is responsible for delivering the goods to a specified destination, ready for unloading, but is not responsible for importing the goods or paying import duties. This rule applies to all modes of transport, including maritime, air, and rail, but does not apply once the goods have been unloaded at the named place.
The standard establishes that the seller bears all risks of loss or damage until the goods are made available to the buyer at the designated point. Foreign buyers use these terms to simplify their logistics chain, as the seller must arrange and pay for all transport from the factory to the buyer’s specified facility.
The transfer of risk from the seller to the buyer occurs at the exact moment the goods are placed at the disposal of the buyer on the arriving vehicle, ready for unloading. This means that any damage or loss that occurs during transit is the sole responsibility of the seller, who must seek compensation from the carrier. However, if the buyer fails to perform import clearance or refuses to accept the goods without a valid reason, the risk transfers to the buyer on the agreed delivery date.
To avoid disputes, both parties must clearly specify the exact address of the delivery point in the contract. A vague description, such as a city name without a street address, can lead to disagreements over where the seller’s responsibility ends and the buyer’s begins. This precision is especially important in large industrial parks or free trade zones where multiple delivery points exist.
Under these terms, the seller must pay all costs associated with transporting the goods to the named destination, including freight, insurance, and transit security charges. This includes any costs for packing the goods securely for international transport and obtaining the necessary export licenses. The buyer, on the other hand, is responsible for all costs associated with unloading the goods from the arriving vehicle and completing the import customs clearance.
This division of costs ensures that the buyer only pays for the domestic portion of the logistics and the applicable import taxes. However, if the seller incurs costs for unloading under the contract of carriage, they cannot recover these costs from the buyer unless otherwise agreed. This rule prevents unexpected charges from being passed on to the buyer after the contract has been signed.
While the seller arranges the transport, the buyer must handle all import customs clearance procedures and pay the associated duties and taxes. This requirement is a critical distinction between these terms and delivered duty paid terms, which require the seller to handle import clearance. In China, where import regulations are complex and require local legal entities to act as the importer of record, these terms are often preferred by foreign sellers who lack a local presence.
The buyer, holding the necessary business licenses and customs registrations, can complete the clearance process more efficiently than an overseas seller. This arrangement reduces the risk of goods being held at the port due to documentation errors or non-compliance with local standards. By separating transport responsibility from import clearance, these terms balance the capabilities of both parties.
Cross-border desk deployment prevents shared sub-tier supplier theft and customs delays by enforcing physical serial tracing and floor oversight at border cross-docks.
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