Incoterms parcel and pallet shipments

Below we give you a brief explanation of the most commonly chosen Incoterms:

EXW – Ex Works – Ex Factory:

The Ex Works delivery condition obliges the seller to produce the goods and have them ready in the warehouse and no more. In other words: You sell the goods and say to the buyer: come and pick them up, they are in the corner of our warehouse. Many sellers or exporters say they supply Ex Works, but this term is often confused with FCA – Free Carrier. The so-called “critical point” is the moment that your buyer has sold the goods to the buyer and makes them available. The customer is therefore responsible for the preparation of the consignment note, any export or customs documents and, most importantly, must load the goods themselves. The transport must therefore also be arranged by the buyer and the driver must load the goods himself in your warehouse or warehouse. You can imagine that this entails quite a few risks. What if the driver damages other goods of yours during loading? How can you prove that the goods are delivered to a specific destination? Who is the carrier? Are the goods properly secured in the box truck or trailer? How are the goods invoiced to your customer, with or without VAT reverse charge? And how can you demonstrate whether these goods actually cross the border?

DAP – Delivery At Place – Delivered at destination:

DAP is slightly different from DAT, because you do not deliver at a (Customs) terminal, but directly to the agreed destination. As with DAT, the seller must take care of the transport , insurance and export documents. So the "Critical Point" here is at the moment the goods arrive at the destination. The buying party has to take care of unloading the goods. One difference with DDP is that you do not have to pay import duties in the destination country. Be careful with this construction, because some countries require customs clearance before you can drive to the final destination in that country. If long waiting times occur during clearance (at the border, for example) because the purchasing party fails to pay its import duties on time, you will be responsible for the waiting costs. So choose this Incoterm only if you have experience with shipments to these countries. DAT is a better option if you are delivering to a customer in a new country outside the EU for the first time.

DDP – Delivery Duty Paid – Delivered and Duties Paid:

The DDP Incoterm places almost all responsibility on the selling party. You sell the goods to the customer and even have to pay import duties in the destination country. Until you have delivered the goods cleared, you are responsible for insurance, transport and export and import documents. PLEASE BE CAREFUL WITH THIS INCOTERM: you are responsible for import duties in the country of destination. Unfortunately, it still regularly happens that exporting parties deliver goods DDP to a customer outside the EU. This can cause significant problems because you have to pay import duties. Strictly speaking, the customer does not have to do anything and just wait for you to deliver the goods. But how do you know what the import duties are for your goods in the country of destination? You must arrange a customs agent in the country of destination who will pay the import duties so that the truck or container can be cleared. In some countries this is a difficult task if you do not have an establishment in that country. And despite the fact that we have a lot of experience with transport to exotic countries, we do not know how much import duties will have to be paid if you transport screws to, for example, Russia or Australia... Make sure you know what you are talking about if you are going to deliver goods outside the EU under the DDP Incoterm.