This business/management problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
ScanSolve AI Answer
The Incoterms 2010 rules, published by the International Chamber of Commerce (ICC), define the responsibilities of buyers and sellers for the delivery of goods under sales contracts. They cover who is responsible for paying for and managing the shipment, insurance, documentation, and customs clearance. Step 1: Discuss the 11 Incoterms 2010 rules. EXW (Ex Works)*: The seller makes the goods available at their own premises. The buyer bears all costs and risks from that point. FCA (Free Carrier)*: The seller delivers the goods to the carrier or another person nominated by the buyer at the seller's premises or another named place. Risk transfers when goods are handed over. CPT (Carriage Paid To)*: The seller pays for the carriage of goods to the named destination. Risk transfers to the buyer when the goods are handed over to the first carrier. CIP (Carriage and Insurance Paid To)*: Similar to CPT, but the seller also pays for insurance against the buyer's risk of loss or damage to the goods during carriage. Risk transfers when goods are handed over to the first carrier. DAT (Delivered at Terminal)*: The seller delivers when the goods, once unloaded from the arriving means of transport, are placed at the disposal of the buyer at a named terminal at the named port or place of destination. Risk transfers upon unloading. DAP (Delivered at Place)*: The seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination. Risk transfers at the named place before unloading. DDP (Delivered Duty Paid)*: The seller delivers the goods, cleared for import, to the buyer at the named place of destination. The seller bears all costs and risks, including duties and taxes. FAS (Free Alongside Ship)*: The seller delivers when the goods are placed alongside the vessel nominated by the buyer at the named port of shipment. Risk transfers at this point. FOB (Free On Board)*: The seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment. Risk transfers when the goods are on board the vessel. CFR (Cost and Freight)*: The seller pays the costs and freight to bring the goods to the named port of destination. Risk transfers to the buyer once the goods are on board the vessel at the port of shipment. CIF (Cost, Insurance and Freight)*: Similar to CFR, but the seller also procures marine insurance against the buyer's risk of loss or damage during carriage. Risk transfers when goods are on board the vessel at the port of shipment. Step 2: State the difference between Incoterms for all modes of transport and those for maritime transport. The primary difference lies in the mode of transport they are designed for and the point of delivery/risk transfer. Incoterms for All Modes of Transport (7 terms): These rules are suitable for any mode of transport (air, road, rail, sea, or multimodal transport) and are generally used when the main carriage is not exclusively by sea. The point of delivery and risk transfer often occurs at an inland point or at the first carrier's facility, not necessarily on board a ship. EXW (Ex Works)* FCA (Free Carrier)* CPT (Carriage Paid To)* CIP (Carriage and Insurance Paid To)* DAT (Delivered at Terminal)* DAP (Delivered at Place)* DDP (Delivered Duty Paid)* Incoterms for Maritime and Inland Waterway Transport (4 terms): These rules are specifically designed for situations where the goods are transported by sea or inland waterways, and the point of delivery and risk transfer occurs when the goods are placed alongside or on board a vessel. FAS (Free Alongside Ship)* FOB (Free On Board)* CFR (Cost and Freight)* CIF (Cost, Insurance and Freight)* 3 done, 2 left today. You're making progress.