What is Delivered Ex Ship ?
213 reads · Last updated: December 5, 2024
Delivered ex-ship (DES) was a trade term that required a seller to deliver goods to a buyer at an agreed port of arrival. The seller assumed the full cost and risk involved in getting the goods to that point. After arrival, the seller was considered to have met its obligation and the buyer assumed all ensuing costs and risks.This term applied to both inland and sea shipping and often in charter shipping. It expired effective 2011.
Definition
Delivered Ex Ship (DES) is an international trade term requiring the seller to deliver goods to a buyer at an agreed port of arrival. The seller bears all costs and risks of transporting the goods to that location. Once the goods arrive, the seller is considered to have fulfilled their obligations, and the buyer assumes all subsequent costs and risks.
Origin
DES is one of the international trade terms established by the International Chamber of Commerce (ICC) to standardize the allocation of responsibilities and costs in international trade. This term was discontinued in 2011 by the ICC's Incoterms, replaced by more modern terms.
Categories and Features
DES is applicable to both inland and sea transport, particularly in charter shipping scenarios. Its main feature is that the seller bears all costs and risks up to the port of arrival, while the buyer assumes all subsequent costs and risks once the goods arrive. This arrangement benefits the buyer as the seller handles most of the transportation process.
Case Studies
Case 1: A Chinese company exports electronics to Europe using DES terms. The seller is responsible for transporting the goods to a specified European port, bearing all transportation costs and risks. Once the goods arrive, the buyer handles customs clearance and inland transport. Case 2: A U.S. company imports coffee beans from Brazil using DES terms. The seller is responsible for shipping the coffee beans to a U.S. port, and the buyer is responsible for unloading and transporting them to a warehouse after arrival.
Common Issues
Common issues include confusion over the buyer's responsibilities after the goods arrive at the port and potential delays faced by the seller during transportation. Investors often misunderstand the allocation of responsibilities under DES, thinking the seller remains responsible after arrival, which is actually the buyer's responsibility.
