Shipping DPU Incoterms 2020

DPU Incoterms 2020 : A Few Quick Points

• Delivered at Place Unloaded (CIP) Incoterms can be used for all modes of transport and even when there are multiple modes of transport involved in transportation.
• Risk transfers from seller to buyer when the goods are unloaded at the place of delivery
• The seller must arrange for carriage to the agreed destination (named place)
• The seller must pay for transport costs to the agreed destination (named place)

When DPU is used in a contract, the named place is mentioned. For example, if a company in Pakistan is selling on DPU terms to a company in Singapore, and the place of delivery is the Singaporean company’s warehouse – the sales contract should at least mention:

DPU (SG Company Warehouse, Singapore, Incoterms 2020)

Shipping DPU Incoterms: Delivery & Transfer of Risks

Delivery happens when the seller unloads the goods at the agreed place of delivery. In most instances this would mean that the delivery takes place when the cargo is handed over at the buyer’s warehouse. It must be noted that the point of delivery is not specifically defined or mentioned in the Incoterm text, hence it is highly advisable to define the point of delivery as accurately as possible in the sales contract.

Shipping DPU Incoterms: Insurance

There is no obligation for the seller to purchase insurance for the buyer’s benefit.

Shipping DPU Incoterms: Carriage

The seller must arrange and pay for carriage to the named place of the destination. The seller must abide by laws and meet all obligations relating to transport security regulations.

Shipping DPU Incoterms: Customs clearance

The seller must meet the obligations of export Customs clearance and the buyer must manage import Customs clearance. This would mean that respective parties responsible for export/import have to manage and pay for all formalities like licenses, security checks, inspections and other document submissions as required.

Shipping DPU Incoterms: Delivery/transport documentation

The seller must provide the buyer with related transport documents. The costs of providing such documents, original or otherwise will be paid for by the seller.

Shipping DPU Incoterms: Packaging & Marking

Seller must ensure and pay any costs related with ensuring that the cargo is delivered in acceptable condition. This would mean the seller has to pay for quality checks, weighing operations and/or counting etc. The seller must package the goods at the seller’s cost.

Shipping DPU Incoterms: Cost allocations

The allocation of costs between buyer and seller are as follows:

Buyer:

• Any additional insurance cover requested
• Any costs involved in obtaining documents for import clearance
• Duties, taxes and other costs related to import
• Any costs incurred due to a failure to give reasonable notice to seller when it is agreed that the buyer is allowed to choose the time for departure from origin or receiving at destination

Seller:

• Transport costs to the named place
• Costs of unloading the goods are the named place
• Transport security related costs
• Cost of providing usual proof of delivery
• Duties, taxes and other costs related to export
• Any costs involved in obtaining documents for export clearance

Shipping DPU Incoterms: Notices

• The seller must use the usual methods to notify the buyer that delivery has been made
• The buyer must give the seller enough notice time to deliver the cargo at the buyer’s chosen time (if agreed that the buyer can choose the time)

What is the difference between DPU & DDP Incoterms?

The above is a common question that arises when traders decide on Incoterms.

The 2 major difference between these Incoterms are:

1. The seller acts as the importer of record under DDP terms
2. The seller is responsible for unloading the cargo at the named place under DPU terms

We have a more comprehensive article on Incoterms 2020 that you can find here.