Practical INCOTERMS® 2020 Scenario Questions

❓ A buyer in Germany purchases machinery from a seller in France under EXW term. Who arranges transportation?
💬 Buyer | The seller only delivers the goods at their premises, and the buyer is responsible for all transportation arrangements from that point onward.

❔ A seller in Italy delivers goods to a carrier chosen by the buyer at the terminal station under FCA term. What costs does the seller pay for export?
✅ In Free Carrier (FCA) terms, the seller is responsible for delivering the goods to the carrier nominated by the buyer and providing all necessary shipping documentation completed. The seller pays all costs related to export customs clearance and duties.

❓ A seller in Singapore provides a buyer in Portugal, agreeing to pay for transport to Lisbon under CPT terms. When does the risk transfer to the buyer?
💬 With Carriage Paid To (CPT), the seller pays for the cost of transportation to the named destination, but the risk transfers to the buyer once the goods are handed over to the first carrier.

❔ A seller in the UK sells electronics to a buyer in Sweden, covering transport and insurance to Stockholm under CIP terms. Who arranges insurance during transit?
✅ Under Carriage and Insurance Paid To (CIP), the seller is responsible for arranging and paying for both transportation and insurance to the named destination. The seller must provide a minimum level of marine insurance coverage.

❓ A seller in the Netherlands delivers goods to the buyer’s warehouse in Belgium under DAP terms. Who is responsible for unloading the goods?
💬 Under Delivered At Place (DAP), the seller delivers the goods at the named place of destination, but the buyer is responsible for unloading the goods. The seller is responsible for export customs clearance, while the buyer is responsible for import customs clearance.

❓ A seller in Italy delivers goods/machinery to a buyer’s facility in Austria under DPU terms. Who handles unloading of the goods?
💬 Under Delivered at Place Unloaded (DPU), the seller is responsible for delivering and unloading the goods at the named destination. The seller bears all risks and costs associated with unloading.

❔ A seller in Italy delivers goods to a buyer in Germany, covering all costs including customs clearance and duties. Who is responsible for import clearance and duties?
✅ Seller | Under Delivered Duty Paid (DDP), the seller assumes all responsibilities for delivering the goods to the buyer’s premises, including handling import clearance and paying duties.

❓ A seller in Italy ships goods alongside a port of service for a buyer under FAS terms. Who bears the cost of loading the goods onto the vessel?
💬 Buyer | Free Alongside Ship (FAS) stipulates that the seller delivers the goods alongside the vessel at the named port, and the buyer is responsible for loading the goods onto the ship.

❔ A seller in India loads goods at the Port of Mumbai for a buyer under FOB terms. When does the risk transfer to the buyer?
✅ Under Free On Board (FOB), the seller’s responsibility extends to loading the goods onto the vessel, with risk transferring to the buyer once the goods are aboard at vessel name.

❓ A seller in Italy ships goods alongside a port of service for a buyer under FAS terms. Who bears the cost of loading the goods onto the vessel?
💬 Buyer | Free Alongside Ship (FAS) stipulates that the seller delivers the goods alongside the vessel at the named port, and the buyer is responsible for loading the goods onto the ship.

❔ A seller in Vietnam ships goods to a buyer in Japan, paying for transport to the coast of Japan under CFR terms. Who is applicable for insurance during transit?
✅ Cost and Freight (CFR), the seller covers the cost of transportation to the named destination. But the buyer is responsible for arranging insurance during transit.

❓ A seller in South Africa sends goods to a buyer in Australia, insuring cargo, and freight to Sydney under CIF terms. Who arranges insurance for the shipment?
💬 Under Cost, Insurance, and Freight (CIF), the seller is responsible for arranging and paying for insurance as well as transportation costs to the named destination. The seller must ensure that the cargo is covered by insurance during transit.