Delivered Ex Ship (DES)

An incoterms term/rule which basically requires the seller to fulfill their delivery obligations by delivering the goods to the port specified by the buyer

What is Delivered Ex Ship (DES)?

Delivered Ex Ship (DES) is an Incoterms term/rule that basically requires the seller to fulfill their delivery obligations by delivering the goods to the port specified by the buyer. The seller is responsible for the delivery and bears all risks and costs associated with it from the point of origin up to the port of delivery.

 

Delivered Ex Ship (DES)

 

The Delivered Ex Ship trade term is now outdated and is replaced by newer trade terms, vis-à-vis, the Delivered at Place (DAP) and the Delivered at Terminal (DAT). The DES trading terms were popularly used for inland and sea shipping, as well as for charter shipping, until 2011.

 

Summary

  • Delivered Ex Ship (DES) is an Incoterms term/rule that basically requires the seller to fulfill their delivery obligations by delivering the goods to the port specified by the buyer. 
  • Once the goods arrive at the buyer’s specified port, all associated risks and costs are shifted on to the buyer, and the seller is no longer responsible. The buyer is then responsible for all customs duties and is responsible for the entire process of clearing the goods.
  • Incoterm trading terms like DES are published by the International Chamber of Commerce (ICC) and are updated from time to time. 

 

What are the Incoterms Rules?

The Incoterms rules are the globally agreed upon and accepted essential terms of trade for the purchase and sale of goods. The term “incoterms” stands for international commercial terms.

The Incoterms rules provide uniform global trade guidelines to individuals participating in any activity related to global trade. They are published by the regulatory body called the International Chamber of Commerce (ICC) and are updated from time to time.

 

The Delivered Ex Ship (DES) Rule

The DES rule stipulated that the seller is to fulfill their delivery obligations by delivering the goods to the buyer’s specified port and must assume all risks and costs associated with it from the point of origin up to the port of delivery.

Once the goods arrive at the buyer’s specified port, all the associated risks and costs are shifted to the buyer, and the seller is no longer responsible. The buyer is then responsible for all custom duties and for the entire process of clearing the goods.

To put it simply, the passing of the risk occurs only and only after the ship arrives at the buyer-specified port of delivery and the goods are made available to the buyer for unloading. Afterward, all risks and costs shift to the buyer, and the seller is free from all the obligations.

 

The Newer, Updated Terms

The Delivered Ex Ship (DES) is an outdated trade term now, following its expiration in 2011. It was then replaced by two new, updated terms:

 

Delivered at Place (DAP)

The Delivered at Place (DAP) term entails that the seller is responsible only and only for the packaging costs of the goods, along with the arrangement of the cargo that will deliver the goods at a place agreed upon with the buyer.

The seller is not assuming all risks and costs associated with the delivery up to the point of delivery, but is solely responsible for ensuring that the goods arrive safely to the point of delivery/final destination on time.

The buyer is responsible for the local taxes applicable to the goods and also the applicable import duties, but is not responsible for any other costs upon the receipt of the good.

DAP is also referred to as the Delivered Duty Paid (DDP).

 

Delivered at Terminal (DAT)

Delivered at Terminal (DAT) stipulates that the seller assumes all transport costs until after the goods are delivered and unloaded at the specific delivery terminal. In addition, the seller also assumes responsibility for export goods clearance.

All costs after the unloading point at the delivery terminal are the buyer’s responsibility.

 

Similar Terms of Trade

The Delivered Ex Ship (DES) trading term was often confused with the Delivered Ex Quay (DEQ) term and the Delivered Ex Works (DEW) term.

However, DEQ was different from DES in the sense that in the former, the seller was responsible for shipping the goods specifically to the wharf at the destination port of delivery, as opposed to simply the destination port of delivery required under DES.

Additionally, DEW was different from DES in the sense that the DEW required the seller to make the goods available simply for pickup at the original business site, instead of getting it delivered to a buyer-specified port of delivery as required under DES.

 

More Resources

CFI offers the Certified Banking & Credit Analyst (CBCA)™ certification program for those looking to take their careers to the next level. To keep learning and advancing your career, the following resources will be helpful:

  • Air Waybill
  • Delivered at Frontier (DAF)
  • Freight on Board (FOB)
  • Negotiated Bill of Lading

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