Knowing the customs terminology can help you better understand your trade.
CPT in English is “Carriage Paid to”. This customs terminology refers to the freight that the seller pays for the shipment to the specified destination. The risk of loss or damage of the goods and any additional costs incurred by the time the goods have been delivered to the carrier shall be transferred from the seller to the buyer. In addition, the seller must go through the customs clearance procedures. “Carrier” means any person who, in a contract of carriage, undertakes to perform the transportation by rail, road, air, sea, inland waterway or a combination of the above, or to perform the transportation by others. If the carrier is also required to ship the goods to the agreed destination, the risk will be transferred from the time the goods are delivered to the first carrier. This term applies to all modes of transportation, including multimodal transport.
CIP in English is “Carriage and Insurance Paid to”. It refers to the seller shall undertake the obligations of the CPT customs terminology and also handle the sea insurance and the insurance premium for the risk of loss or damage of the goods that the buyer should bear in transit. During this period, the seller must pay the freight to ship the goods to the destination, and the buyer bears all risks and additional costs after the seller delivers. This term applies to any mode of transport.
DAF in English is “Delivered at Frontier”. It means that the seller undertakes to transport the prepared goods to the designated place on the border, and to deliver the goods that have not been unloaded to the buyer for disposal before the customs clearance of the neighboring country. Delivery is completed when the export customs clearance procedure has been completed even if the import clearance procedure has not yet been completed. The term “border” can be used on any border, including the borders of exporting countries. Therefore, it is extremely important to accurately define the borders referred to by the designated location and the specific delivery point. This term applies primarily to goods transported by rail or road, as well as to other modes of transport.
DES in English is “Delivered Ex Ship”. It means that the seller shall deliver the prepared goods to the buyer without going through the customs clearance procedures on the deck of the ship at the designated port of destination. The seller shall bear all costs and risks including the transportation of the goods to the designated port of destination. The DES incoterm can only be used when the goods are unloaded on board at the port of destination by sea or by river or multimodal transport. DES applies only to sea or inland water transport.
DEQ in English is: “Delivered Ex Quay (Duty Paid) “. This term refers to the seller’s obligation to deliver the prepared goods to the buyer at the terminal of the designated port of destination, and the seller bears all risks and expenses, including those incurred in tariff, tax and other costs during the delivery. Considering the countries around the world are using DEQ terms, the question of who is responsible for the import formalities is not completely unified. Therefore, attention must be paid when using DEQ terminology. This term applies to maritime transport or inland water transport.
DDU in English is “Delivered Duty Unpaid”. It means that the seller shall undertake the delivery of the prepared goods at the place designated by the importing country and bear all costs and risks (excluding customs duties, taxes and other official fees) of the goods to the designated place and customs formalities. On the other side, the buyer shall bear the additional costs and risks arising from the failure to promptly handle the customs clearance of the goods. This term applies to all modes of transportation.
DDP in English is “Delivered Duty Paid”. It means that the seller delivers the prepared goods at the designated place in the importing country, and bears all costs and risks of transporting the goods to the designated place, and handles the import customs clearance. That is to say, the seller shall complete the import customs clearance at the designated destination, and deliver the goods that have not been unloaded on the delivery vehicle to the buyer to complete the delivery. The seller must bear all risks and expenses of transporting the goods to the designated destination, including any “taxes and fees”.