Useful Information - Incoterms

Incoterms - DES/DEQ

Terms prefixed 'D' are 'Contracts of Arrival' involving the passing of risk and responsibility at the point where costs also terminate.

DES (Delivered Ex Ship) is Monomodal. Although not triggered by the use of the ship's rail, the point of handover (ship's side, arrived) will be inappropriate in a modern port. The buyer may not be able to take control at a point in a restricted port area. An alternative D term such as DDU might be better suited to represent an achievable point of handover for both parties.

DES will often financially correlate to CFR. But, for the buyer DES represents CFR without the disadvantages of placing risks on the buyer, over which they have no control. (See CFR)

From the seller's perspective, DES reverses the risk advantages of CFR, placing all risks with the seller until the cargo arrives at the named port.

DEQ (Delivered Ex Quay) extends the shipper's responsibility beyond the arrival of the vessel to the point where the goods are discharged.

Although not triggered by the use of the ship's rail, the point of handover (landside on the harbour, duty paid) is frequently inappropriate in a modern port environment. The buyer may not be able to take control at that point and an alternative D term such as DDP may be better suited to identify an achievable point of handover between the two parties.

Seller's using DEQ are cautioned that they must be in a position to pay the destination discharge fees both in physical terms as well as administratively in accordance with any Exchange Control Regulations applicable in the country of Origin.

Caution is appropriate when using D prefixed terms with Documentary Credits as few 'documents' are geared to record the passing of risks on arrival.

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