Training Document (1).pdf

Training Guide International Trade What is International Trade? International Trade is the exchange of Capital, Goods and Services across International Borders or Territories. It is the exchange of Goods and Services among nations of the World. In every country, such trade represents a significant...

Training Guide International Trade What is International Trade? International Trade is the exchange of Capital, Goods and Services across International Borders or Territories. It is the exchange of Goods and Services among nations of the World. In every country, such trade represents a significant share of Gross Domestic Product. GDP – It is a monetary measure of the market value of all final Goods and services produced in a period of time. Shipping Shipping is a physical process of transporting goods and cargo from one place to another. Virtually every product ever made, bought, or sold has been affected by Shipping. Despite the many variables in shipped products and locations, there are only three basic types of Shipment. The three types of Shipment :- Land Sea Air Transportation through Land Land Transportation is the transport or movement of goods from one place to another on land usually by Rail or Road. Goods are moved on land by mainly Trucks and it is the most popular form of Shipping. Even in Air and Sea Shipments, Land transportation is still required to take the goods from its origin to airport or seaport and then to its destination. Land Transportation is typically more affordable than air shipments and expensive than transportation through sea. Trucks are much faster than Ships but are slower than planes. Transportation through Sea Sea Transportation refers to movement of goods on waterways by using various means like boats, steamers, ships etc. Transport by water is cheaper than transport by air. Sea Transport is highly cost effective especially for heavy loads or bulk cargo such as heavy machines, coal, ores or grains etc. Sea Transportation is used by businesses for the delivery of Goods from distant suppliers. Most sea transportation is conducted in Containers which vary in size. Sea tankers are used for bulk shipments of loose goods such as Crude Oils, grains etc. Transportation through Air Air Travel is a form of travel in vehicles such as Helicopter, Jet planes, Airplanes etc. Use of Air travel has greatly increased in recent times. It is a method of transportation by which passengers, cargo etc are transported by air. The chief advantage of this method is the considerable amount of time saved because of high speed of the planes. Different Parties Parties Involved Shipper or Exporter The party who delivers goods for shipment The party who may also be known as vendor, supplier or seller The shipping line’s customer on the export side (origin) Consignee or Importer The party who is entitled to receive the goods after shipment The party who may also be known as importer or buyer The shipping line’s customer on the import side (destination) Carrier The party who operates ships and transports cargo for others The party who is also known as the shipping line or transport provider Freight Forwarder Hired by some exporters and importers to assist with shipping-related processes such as booking, documentation and cargo consolidation In some cases, the actual exporter and importer maintain the commercial relationship with the carrier In other cases, it is the freight forwarder who is the carrier’s customer and therefore becomes the shipper / consignee. Arranges transportation of goods, manage documentation, and arrange customs clearance. Non-Vessel operating common carrier (NVOCC) A cargo consolidator in ocean trades who buys space from a carrier and resells it to smaller shippers. The NVOCC issues bills of lading, publishes tariffs, and otherwise conducts itself as an ocean common carrier, except that it does not provide the actual ocean or intermodal service. Bank Facilitates payment for goods between exporter and importer e.g. through a payment mechanism known as Letter of Credit (LC) Customs House Broker Licensed to assist exporters and importers to clear goods through customs Terminal Operator Handles all activities in the port area on behalf of one or more shipping lines e.g. loading and discharging of containers Government Authorities Creates, administrates and enforces compliance with legislation related to international trade e.g. trade and security matters Types of Sea Transportation Types of Transportation Mother Vessel Feeder Vessel Barge Mother Vessel A Mother Vessel (M.V.) is a term in oceangoing transport-basically a sea going ship that serves only major ports. It is a large Ocean going vessel. It is a floating vessel that transports cargo from one place to another place basically the major ports. Large Mother Vessels require specialized deep water terminals. Feeder Vessel A Third party vessel normally used for short sea transportation to and from ports to the main ocean vessel. They directly connect these small ports with main ports. Feeder vessels or feeder ships are ships of various sizes, but mostly understood to be sea going vessels with an average capacity of carrying 300-1500 TEU. Feeders collect containers from different ports and transport them to central container terminals where they are loaded to bigger vessels. In that way the smaller vessels feed the big liners, which carry thousands of containers. Barge A barge is a flat-bottomed boat, built mainly for river and canal transport of containers or heavy goods. Most barges are not self-propelled and need to be moved by tugboats towing or towboats pushing them. A barge is a flat-bottomed boat. It doesn’t have engine so it is either pushed or pulled by other boat. It is used for mid-sea movements. Ex-If a vessel is carrying few containers for a particular destination not planned to discharge, in that case it calls a barge and discharges the containers in the mid sea. Liner Trade A regular service which according to a pre defined schedules serves a number of regular ports within a trade. It Operates on a pre determined route. It has different commodity on board. It has many Shipper and Consignee per sailing. It offers customer regular space between two ports at fixed intervals It is the most common type of Operation for Container vessel Ports Sea Ports A port is a specified area which facilitates for berthing, anchoring and handling of vessels with equipment and man power for loading and discharging the goods from the vessels. A port is a location on the coast or shore containing one or more harbour where ships can dock and transfer cargo or people to or from land The Port further provides facilities to vessels that are in port such as supplying of stores, provisions, bunker, fresh water and workshop facilities for maintenance of vessels. Sea Port Types :- Base Ports: These are bigger ports where mother vessels call. Major ports that ship lines call on with their large (usually transoceanic) vessels. Cargo bound for ports within the base port hinterland is transshippedon feeder vessels. E.g. Los Angeles, Hong Kong. Feeder Ports: These are secondary ports handling a mix of feeder trade and direct intraregional or intra-continental trade. These ports typically do not handle main line vessels on long haul routes between continents. These are comparatively small ports where mother vessel can not take birth but smaller vessels can. E.g. Kandla, Vishakhapattanam. Hub ports: These are ports at which containers are transshipped from one vessel to another are referred to as Hub Ports. E.g. TanjungPelepasin Malaysia, Rotterdam in Europe. Functions of Sea Port :- 1. Loading/Unloading of Vessels 2. Storing/Warehousing the cargo 3. Trans-shipment of Cargo 4. Provide shelter to the ships 5. Support service for Vessels 6. Base for Industrial development Container Containers Containers SCAC Codes SCAC – Standard Carrier Alpha Code It is typically four letters long. Especially transport companies who have business connections with the US have to use SCAC codes. This is an unique code used to identify transportation companies like Shipping Lines/Freight Forwarders/NVOCCs etc. MSCU is MSC, MEAU is Maersk, OOLU is OOCL, SUDU is Hamburg Sud, HLCU is Hapag Llyod Container Number All containers have their own unique identification number which consists of 4 letters and 7 numbers e.g. GESU8564592 The first four characters are the SCAC code of the transportation company who is providing the Container The container number enables carriers to keep track of their containers at all times and customers to follow their shipments e.g. via the carriers’ internet tracking systems The number of a specific container remains the same during the life time of the container The Containers are used for moving products or goods from one location to another location or from one country to another country. Types of Containers There are commonly 7 types of containers which are used by Shipping Lines to move the cargo or goods from one location to another location. 1. Standard or Dry Van DV Containers 2. High Cube or HC Containers 3. Open Top or OT Containers 4. Flat Rack or FR Containers 5. Refrigerated or RE Container 6. Bulk Container 7. Tank or TA Container Dry Van or DV (20’ / 40’ Container) Dry Van containers are also known as general purpose containers. They are closed containers, i.e. they are closed on all sides. A distinction may be drawn between the following types of standard container: Doors at one or both end's Doors over the entire length of one or both sides Doors at one or both end's and doors on one or both sides. HC (High Cube) 20’/ 40’ ISO container High-cube containers are similar in structure to standard containers, but taller. In contrast to standard containers, which have a maximum height of 2591 mm (8'6"), high-cube containers are 2896 mm, or 9'6", tall. High-cube containers are for the most part 40' long, but are sometimes made as 45' containers. OT (Open Top) 20’/ 40’ ISO container The walls of open-top containers are generally made of corrugated steel. The floor is made of wood. It has the following typical distinguishing structural features. The roof consists of removable bows and a removable tarpaulin. The door header may be swiveled out. These two structural features greatly simplify the process of packing and unpacking the container. In particular, it is very easy to pack and unpack the container from above or through the doors by crane or crab when the roof is open and the door header is swiveled out. It should be noted, however, that the purpose of the roof bows of an open-top container is not solely to support the tarpaulin but also to contribute to container stability. Flat racks are therefore more suitable for over height cargoes.Lashing rings, to which the cargo may be secured, are installed in the upper and lower side rails and the corner posts. FR (Flat Rack) 20’/ 40’ ISO container Flat racks consist of a floor structure with a high loading capacity composed of a steel frame and a softwood floor and two end walls, which may either be fixed or collapsible. The end walls are stable enough to allow cargo securing means to be attached and several flat racks to be stacked on top of one another. Flat racks are available in 20' and 40' sizes. RE ’(Reefer ) 20’/ 40’ ISO container Refrigerated container is mainly used for frozen cargo which needs the controlled temperature. It requires external electricity to run embedded compressor unit. Inside temperature can be controlled for ±25°C in reefer container. The temperature display is attached to the outside of the refrigeration unit, so that operation of the unit may be checked at any time. Refrigerated containers are mainly available as 20' and 40' containers. Break Bulk Container Bulk (or bulk cargo) containers have three loading hatches in the roof, each of a diameter of approx. 455 mm (1 3/4'). The distance between the hatches (center to center) is 1.83 m (6'). On the door side, there are two discharge hatches, which are sometimes equipped with short discharge tubes for guiding the bulk cargo. Alternatively, two unloading hatches may be mounted in the doorways, for emptying the containers. Such containers may also be used for general cargo. Lashing rings are mounted in the top side rails for securing the cargo. Some bulk containers are equipped with forklift pockets, which allow handling by forklift trucks. Tank Container Tank containers must be at least 80% full, to prevent dangerous surging of the liquids in transit. On the other hand, they must not as a rule be over 95% full, or there will not be sufficient allege space for thermal expansion. Tank containers are generally designed for an operating pressure of up to 3 bar (above atmospheric). The test pressure used is 4.5 bar (above atmospheric). If the cargo requires temperature-controlled transport; tank containers can be equipped with insulation or heating. The temperature of the cargo may be precisely controlled using temperature sensors. The typical StoltTank Container conforms to UN T11 specifications for the carriage of hazardous products in bulk. Capacity ranges from 20,000 and 26,000 litres, depending on the cargo, with a working pressure rating of 3-4 Bar. Seal Number A seal is a numbered locking device. To make sure that nobody interferes with the cargo during transit, a seal must be affixed to the container doors at the time the cargo is loaded and must not be broken until the cargo reaches its final destination. Seals are in the interest of all parties in the shipping process. Seals minimise the risk of unauthorised access to the container contents and therefore reduce the risk of theft, pilferage as well as other interference such as placement of contraband (illegal or non-declared goods). The seal number is recorded in the carrier’s IT systems and on relevant shipping documents. Cargo  Cargo Types :- Types :- General Cargo Out of Gauge Cargo Reefer Cargo Bulk Cargo Hazardous Cargo General Cargo Normal merchandise and goods. Packed in boxes/cartons or bags. Includes both raw materials, components for manufacturing and finished goods. E.g. clothing, furniture, toys, components, plastic products, etc. Out of Gauge Cargo Container types used to carry cargo that are beyond the normal dimensions of the containers and for that reason called “out of gauge” (OOG) cargo, also often referred to as break bulk cargo. Odd-sized goods that do not fit into a standard container, e.g. windmills and large machinery. Reefer Cargo Goods requiring a temperature-or humidity-controlled environment during transport are carried in special reefer containers. e.g. fresh fruit, fish and other perishable products. Leather products may also be carried in reefer containers (requires humidity control). Bulk Cargo 1.Dry bulk cargo:-Coal, grain, (wheat, maize, rice, barley, oats, rye, sorghum, soybeans, etc.) Iron ore (ferrous & non-ferrous ores, ferroalloys, pig iron, scrap metal, etc.) Wood chips cement chemicals (fertilizer, plastic granules & pellets, resin powder, synthetic fiber, etc.) Dry edibles (for animals or humans: alfalfa pellets, citrus pellets, livestock feed, flour, peanuts, raw or refined sugar, seeds, starches, etc.) Bulk mine (sand & gravel, copper, iron, (ores in pellet form) , salt, etc). 2.Liquid bulk cargo:-Oil liquefied natural gas (LPG) gasoline chemicals liquid edibles (vegetable oil, cooking oil, fruit juices, etc.) Hazardous Cargo Substance capable of posing unreasonable risk to the personnel, vessel and marine environment. Determined by its properties /characteristics, i.e. Explosive, Flammable, Corrosive, Toxic etc. Goods of a dangerous nature. The International Maritime Organization (IMO) operates with 9 classes of dangerous goods. Classification of Hazardous Cargo Shipping cargo or commodity are generally classified under 9 categories. Classification of different commodities is essentially required to identify various charges applied during transportation, custom formalities, handling instruction as per the trade regulation of a particular country. Packages Type of Packages 1. Pallets / Skids 2. Boxes 3. Drums 4. Cartons 5. Bags Type of Packages Pallets / Skids – It is a flat transport structure that supports goods in a stable fashion while being lifted by a forklift or jacking device or a crane. While most Pallets are wooden but Pallets can also be made of plastic, metal or recycled materials. It is also know as plane flat structures utilised in cargo container ships for supporting goods. Cargo is piled atop these structures and the process is know as Palletizing. Type of Packages Boxes – It is described as variety of containers for permanent use as storage or for temporary use for shipping cargo. They may be made of durable materials such as wood or metal or of fibreboard or paperboard. Type of Packages Drums – A drum is a cylindrical container used for shipping bulk cargo. Drums can be made of steel, dense paper board (called as fiber drum) or plastics and are generally used for the transportation and storage of liquids and powders. Drums are often certified for shipments of dangerous goods. Type of Packages Cartons - A carton is a box or container usually made of paperboard and sometimes of corrugated fiberboard. Many types of cartons are used in packaging. Sometimes a carton is also called a box. Type of Packages Bags :- It is also known as sack and is a form of container which can contain cargo inside it. Bags allow people to easily collect loose materials such as food grains/powder and transport the cargo from one place to another place. Shipping Line What is Carrier/Shipping Line A Shipping Line is a company that operates the ships that actually carry the containers and cargo from one location to another location. Example – Maersk Line/CMA CGM/Hapag Llyod/China Shipping are some of the Global Shipping Lines have their container services covering most locations of the world. When the Shipping Lines have shortage of Containers and/or they might have requirement of certain types of Containers like Flat Racks/Open Top then Container Owners comes into the picture like Triton/CAI/Florens etc. Warehouse/CFS and ICD Warehouse/CFS (Container Freight Station) Facility at which small cargo lots for Exports are received from Customer/Shipper for stuffing into containers or at which small cargo lots for Imports are stripped from Containers and delivered to Customers/Consignee. Warehouse/CFS (Container Freight Station) It is a commercial building for storage of goods. Stuffing and De stuffing takes place at this location also called Dock Stuffing. They usually have loading docks to load and unload goods from trucks. Sometimes they are designed in such a manner that loading and unloading of goods are done directly from railways/airports or sea ports. Inland Container Depot (ICD) It is a facility located in Inland or far away from Port also called as “Dry Port”. Realistically we can’t change place of manufacture nor place of consumption. Cargo must move to/from Inland Container Depot (ICD) to/from Port Terminals. Inland Container Depot (ICD) Functions Receipt and dispatch/delivery of cargo. Stuffing and stripping of containers. Transit operations by rail/road to and from serving ports. Customs clearance. Consolidation and desegregation of LCL cargo. Temporary storage of cargo and containers. Reworking of containers. Services Handling of containers from road, rail and barges to a temporary storage area. E.g. CY. Intermediate storage between the various transportation modes. Special containers and/or cargo may require additional provisions, such as refrigeration services and special areas for dangerous cargo. Depot functions as the storage of empty containers. Space may also be required for temporary storage of loaded containers awaiting movement out of an ICD. Maintenance and repair services for containers –container handling equipment, refrigeration equipment, road chassis, etc. In this respect, an ICD is a self-sufficient unit. Types of Services 1. CY/CY 2. CFS/CFS Types of Services : CY/CY The transport provider receives a full container from the shipper and delivers the full container at destination. It is also called as FCL. The transport provider never physically sees the cargo that the shipper has stuffed into the container. It handles only container. Types of Services : CFS/CFS The transport provider receives loose cargo from the shipper at origin and delivers the cargo loose to the consignee at destination. It is also called as LCL. The transport provider consolidates LCL cargo from multiple shippers into a container for shipment. At destination, the transport provider de-consolidates the container and delivers the different LCL cargoes to the various consignees. Types of Shipment FCL – Full Container Load LCL – Less Than Container Load Types of Shipment FCL (Full Container Load) – A container which is fully loaded by the shipper is referred to as a Full Container Load (FCL). The shipper loads the container and delivers it as a single unit to the transport provider. The transport provider does not physically handle the cartons, pallets or other packages –only the container. Types of Shipment LCL (Less Than Container Load) – Shippers/Supplier who do not have enough cargo to fill a container on their own will deliver their goods in cartons, pallets or other packaging to the transport provider or a NVOCC/Freight forwarder. The transport provider or NVOCC/Freight forwarder will consolidate the goods into a container together with other shippers’ cargoes going to the same destination. Types of Shipment : LCL Important Locations Place of Origin : Location where shipment begins its movement. Place of Receipt: Location where cargo enters the care and custody of carrier. Port of Loading: Port where cargo is physically loaded on vessel. Port of Discharge: Port where cargo is discharged from means of transport. Place of Delivery: Place where cargo leaves the care and custody of carrier Place of Final Destination: The place where carrier actually turns over cargo to consignee or his agent. Important Locations : Gateway A Gateway is a consolidation point where freight/cargo from receiving terminals around the country are transported to for loading. Main Gateways :- New York, Miami and Los Angeles in US Secondary Gateways :- Chicago, Seattle, Atlanta and Houston in US Legs of Container Movement Exports :- In economics, an export is any good or commodity, transported from one country to another country in a legitimate fashion, typically for use in trade. Its counterpart is import. Export of commercial quantities of goods normally requires involvement of the customs authorities in both the country of export and the country of import. Imports :- In economics, an import is any good or commodity, brought into one country from another country in a legitimate fashion, typically for use in trade. Import goods or services are provided to domestic consumers by foreign producers. Import of commercial quantities of goods normally requires involvement of the customs authorities in both the country of import and the country of export. Transhipment :- The process of unloading cargo at an intermediary port and then reloading it for shipment to its final destination. When the cargo is reloaded, it is possible it can be placed on another mode (i.e., from ocean vessel to truck). Another reason is to combine small shipments into a large shipment, dividing the large shipment at the other end. Transhipment usually takes place in transportation hubs. Much international transhipment also takes place in designated customs areas, thus avoiding the need for customs checks or duties, otherwise a major hindrance for efficient transport. Exports Export Movement / Leg Origin Flow (Export Cycle) : Documents Booking Booking Confirmation Dock Receipt Shipping Instructions Vessel Manifest Invoice – Prepaid Charges Bill of Lading (B/L) Origin Flow (Export Cycle) : Documents Booking :- It is a request from customer to Shipping Line/Consolidators to ship the cargo from one place to another place. Booking Confirmation :- It is a message by Carrier/Consolidator to customer advising that his booking has been accepted. Dock Receipt :- It is a document issued by the carrier or terminal operator to confirm container arrival at the terminal or yard. Shipping Instructions :- It is the information provided by the customer to carrier about the shipment, in particular description of goods, container no., seal no., sender’s details, receiver details etc. Vessel Manifest :- Document that lists in detail all the Bills of Lading issued by the carrier or its agent. A detailed summary of the total cargo of a vessel used for customs purpose. Invoice :- It’s a formal demand for payment of charges either Prepaid or Collect. Bill of Lading (B/L) :- Any goods moving out of country needs to be approved or permitted by customs by mandatory filing of a legal document called Bill of Lading. It contains all required details about the goods planned for export. STI Booking and Carrier/Liner Booking Export Documentation Bill of lading (B/L) is also known as a Contract of Carriage Master B/L = Carrier B/L House B/L = Shipco B/L Proof B/L = Draft B/L Shipco House Bill of Lading (HBL) Parts of HBL : Parts of HBL : Parts of HBL : Imports Import Movement / Leg Destination Flow (Import Cycle) : Documents Arrival Notice Vessel Manifest Invoice with Collect charges Bill of Lading (B/L) Cargo Release Destination Flow (Import Cycle) : Documents Arrival Notice :- It’s an email or fax notification to consignee by the carrier containing arrival information such as vessel name & voyage, BL number, ETA, container, seal no. charges due. Invoice with Collect charges :- It’s a formal demand for payment of charges either prepaid or collect. Cargo Release :- Term used to describe the confirmation by the carrier that container can be released to the consignee. Import Documentation Arrival Notice: The notification being sent from the import department to the consignee and/or notify party containing relevant information to getting the shipment released from customs and picked up. Overall responsible for inputting, verification and sending arrival information to the consignee & notify party. Making sure that missing or incorrect information in the pre-alerts are addressed with the origin office. Ensuring that the arrival notice is complete and accurate before sending it out. Arrival Notice : Parts Arrival Notice : Parts Arrival Notice : Parts Arrival Notice : Imports : Types of Shipment Inco Terms Inco Terms What is Inco Terms ? The Inco Term rules or International Commercial Terms are a series of pre defined commercial terms published by the International Chamber of Commerce (ICC) relating to International Commercial Law. They are commonly used in both International and Domestic trade contracts. They are widely used in International commercial transaction or procurement processes as the use in international sales is encouraged by trade councils, courts and international lawyers. A series of three-letter trade terms related to common contractual sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs, and risks associated with the transportation and delivery of goods. Types Inco Terms 1. EXW - Ex Works 2. FCA – Free Carrier 3. FAS – Free Alongside Ship 4. FOB – Free On Board 5. CPT – Carriage Paid To 6. CFR – Cost and Freight 7. CIF – Cost Insurance and Freight 8. CIP – Carriage and Insurance Paid 9. DAT – Delivery At Terminal 10.DAP – Delivery At Place 11.DDP – Delivery Duty Paid 1. EXW-Ex works The seller makes the goods available at his/her premises. The buyer is responsible for uploading. This term places the maximum obligation on the buyer and minimum obligations on the seller. The Ex Works term is often used when making an initial quotation for the sale of goods without any costs included. EXW means that a seller has the goods ready for collection at his premises (works, factory, warehouse, plant) on the date agreed upon. The buyer pays all transportation costs and also bears the risks for bringing the goods to their final destination. The seller does not load the goods on collecting vehicles and doesn't clear them for export. If the seller does load the goods, he does so at buyer's risk and cost. If parties wish seller to be responsible for the loading of the goods on departure and to bear the risk and all costs of such loading, this must be made clear by adding explicit wording to this effect in the contract of sale.. 1. EXW-Ex works 2. FCA-Free Carrier The seller delivers goods, cleared for export, to the buyer-designated carrier at a named and defined location. This is used for any mode of transport. The seller must load goods onto the buyer's carrier. The key document signifying transfer of responsibility is receipt by carrier to exporter. 3. FAS-Free Alongside Ship The seller must place the goods alongside the ship at the named port. The seller must clear the goods for export. Suitable only for maritime transport but NOT for multimodal sea transport in containers. This term is typically used for heavy-lift or bulk cargo. 4. FOB – Free On Board The seller must load the goods on board a vessel designated by the buyer. Cost and risk are divided when the goods are actually on board of the vessel. The seller must clear the goods for export. The term is applicable for maritime and inland waterway transport only but NOT for multimodal sea transport in containers. The buyer must instruct the seller the details of the vessel and the port where the goods are to be loaded, and there is no reference to, or provision for, the use of a carrier or forwarder. This term has been greatly misused over the last three decades ever since Incoterms 1980 explained that FCA should be used for container shipments. It means the seller pays for transportation of goods to the port of shipment, loading cost. The buyer pays cost of marine freight transportation, insurance, uploading and transportation cost from the arrival port to destination. The passing of risk occurs when the goods pass the ship"s rail at port of shipments. 4. FOB – Free On Board 5. CPT – Carriage Paid To The seller pays for carriage. Risk transfers to buyer upon handling goods over to the first carrier at place of shipment in the country of export. This term is used for all kind of shipments. 6. CFR – Cost and Freight Seller must pay the costs and freight to bring the goods to the port of destination. However, risk is transferred to the buyer once the goods are loaded on the vessel. Insurance for the goods is NOT included. This term is formerly known as CNF (C&F, or C+F). Maritime transport only. 7. CFR – Cost Insurance and Freight Exactly the same as CFR except that the seller must in addition procure and pay for the insurance. Maritime transport only. 7. CFR – Cost Insurance and Freight Exactly the same as CFR except that the seller must in addition procure and pay for the insurance. Maritime transport only. 8. CIP – Carriage and Insurance Paid To The containerized transport/multimodal equivalent of CIF. Seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier. 9. DAT – Delivered at Terminal Seller pays for carriage to the terminal, except for costs related to import clearance, and assumes all risks up to the point that the goods are unloaded at the terminal. 10. DAP – Delivered at Place Seller pays for carriage to the named place, except for costs related to import clearance, and assumes all risks prior to the point that the goods are ready for unloading by the buyer. Import clearance = import duty and VAT and not the Import Customs Clearance. 11. DDP – Delivered Duty Paid Seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination including import duties and taxes. The seller is not responsible for unloading. This term is often used in place of the non-Incoterm "Free In Store (FIS)". This term places the maximum obligations on the seller and minimum obligations on the buyer. Abbreviations : Thank You