Delivery

Under the Incoterms rules, “delivery” is linked to the transfer of risk and responsibility for
the consignment from the seller to the buyer.

Particular care must be taken with the “C” rules:

CPT Carriage Paid to”,
CIP Carriage and Insurance Paid to”,
CFR Cost and Freight“,
CIF Cost Insurance and Freight“.

Consider this rule “CIP Hong Kong Terminal 3

This rules obliges the seller to contract with a carrier to transport the goods to the specified place, Hong Kong Terminal 3.   This is the named place of destination.

However there is another critical point – the point where the seller hands the goods over to the carrier.   This is the place of delivery, where risk passes from seller to buyer.

 In this example, there are a number of possible places of delivery – e.g. it could be the container yard at the place of loading for the sea voyage (e.g. Felixstowe berth 8); or it could be the seller’s premises, or another logistics hub .   So it is good practice for the buyer and seller to identify the place of delivery as well as the place of destination, and to include it in the commercial agreement.

If a place of delivery has not been agreed, and there is more than one carrier, then by default it is taken to be the point where the goods are taken in charge by the first carrier.

For the “sea and inland waterway” rules “CIF Cost Insurance and Freight“, “CFR Cost and Freight“, the goods are deemed to be delivered when placed on board the vessel for transport to the place of destination.

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