Delivery conditions are a set of legislative acts that regulate how and when the goods will be transferred from side to side, how they will pay for, insure, who is responsible for the safety at one or another stage of transportation, etc.
A significant part of world trade is accounted for by international trade, which creates the need for unification of the rules for the transport of goods in compliance with national laws. For these purposes, for almost 80 years now, the International Rules for the Interpretation of Trade Terms (Incoterms) have been issued, which contain the main terms of delivery.
I must say that the use of Incoterms in our country is of a recommendatory nature. But if the contract contains a reference to the basic conditions established by the rules, then their observance becomes mandatory. The rest should be guided by the fourth section of the Civil Code of the Russian Federation, which indicates the procedure for applying certain business customs (article 1211).
Currently Incoterms as amended in 2010 are used for trading operations. These rules contain eleven basic provisions, which reflect the terms of delivery. Some of them are not valid for one mode of transport, but for the entire chain of carriers. Regulatory acts differ from the previous issue (2000) in that they included sections of DAT and DAP, which replaced the delivery terms of DAF, DDU, DEQ and DES.
The term DAF in the old rules meant that the seller delivered the goods to the buyer at the named point or place on the border (before the goods passed to the customs border of the buyer side). At the same time, the goods passed customs procedures for export and have not yet been unloaded from the vehicle. Thus, the subject of delivery will still be subject to customs procedures for import.
The Incoterms Rules (edition 2010) contain seven basic procedures for all modes of transport and four procedures for inland water transport and shipping. The first variety of rules include: DPP (the goods are delivered with payment of duties), DAP (delivery to the destination), DAT (the goods are delivered to the customs terminal), EXW (delivery ex-factory), FCA (delivery ex-carrier), and CIP and CPT, where in the first case the delivery conditions indicate that the carriage and insurance are paid to some place, and in the second to a certain point only the carriage is paid.
FOB delivery conditions, like FAS, CIF and CFR, assume that the cargo leaves the port and also arrives at the port. These rules existed in the previous version, however, the term “board of the ship” was introduced in the new version, which replaced the concept of “handrails” as a delivery point for all cases except FAS. The terms of delivery of the last rule assume that the operation is completed if the seller has completed the necessary customs measures for export, brought the goods to the port specified by the contract, placed them along the side of the vessel at the berth, barge, etc. Import procedures, including payment of customs duties, here deals with the seller.
The FOB procedure assumes that the seller brought the goods on board the vessel specified in the contract, CIF - that the seller delivers the goods on board, pays freight to the destination and insurance (usually with minimal coverage), and CFR - that the supplier is only responsible for delivering the goods to specific port with freight payment. The order of supply is selected in each case, because Each port determines the conditions under which it can work with certain ships and cargo.