Daily Archives: June 6, 2022

DPU Incoterm 2020 can be used for any type of transport; it’s also suitable for shipping that involves more than one transportation mode, which is known as multimodal transportation.

The seller pays the cost of warehousing and packing, loading, primary transportation at the point of origin, customs clearance for exports, the cost of export duties if any, ocean freight, transport at the destination (based on the named location), and unloading at the designated location.

The buyer is responsible for customs clearance at the time of import as well as import duties and transportation to the destination (based on the named location).

DPU Incoterm 2020 Risk:

The risk of DPU is the responsibility of the seller until the goods are unloaded at the specified location.

Insurance:

The seller organises insurance in the event the buyer suffers DPU.

DPU Incoterm 2020 Example:

Let’s look at DPU in more detail using an example.

Let’s suppose that one exporter of granites from Bangalore, India approached a buyer of granites from Casablanca, Morocco who has an office and showroom located in Casablanca known as “Heavy Stones”. The buyer is looking for polished granite slabs that are of high quality. The buyers and sellers begin discussions about the exchange.

Negociation as per the DPU Incoterm 2020:

The client wants granite slabs delivered to their facility in Casablanca. Because the seller in Bangalore has a strong position in the shipping industry, they have decided to use the DPU incoterm.

Negotiations begin according to their scope of work covered under DPU and they agree on a cost for each square foot.

They chose to proceed with LC since the seller and buyer aren’t aware of one another.

Contract in accordance with DPU Incoterm 2020:

Once the price is agreed upon in both parties’ favor, they draw up an agreement with DPU incoterms.

Delivery terms: DPU Heavy Stones warehouse, Casablanca

Payment terms: Revocable letter of credit

DPU Incoterm 2020 operations process:

The seller then begins cutting, polishing, and finishing the granite blocks. In parallel, they call freight forwarders or liners to book containers and contact their transporters for their vehicles. They then produce the final product, which is known as granite slabs. When the finished products are in place, they package them and contact freight forwarders and transporters to arrange for the placement of trucks that transport containers to their plant in Bangalore, and then stuff the final items into containers and ship them to Bangalore ICD for export. Customs clearance takes place in ICD. The containers are then delivered to the shipping company with the appropriate documents. Once the seller has contacted an insurance agency and gotten the insurance for the cargo at 110 percent of the value of the invoice, Containers are loaded onto the rail vehicle and transported to the closest port, which can be found at Chennai port.

The formalities for export are done at Bangalore ICD, so the sellers or their agents approach different offices to collect the post-sealing documents. When the containers reach Chennai port, they are unloaded at the terminal. In accordance with the schedule, the vessel will arrive at the port and the containers will be loaded onto the vessel. After the containers have been loaded onto vessels and once the ship has sailed, the liner issues a B/L for shipping on board to the seller or forwarder.

The seller, along with his agents, will collect the shipping documentation (post shipping documents).

Documents must be prepared according to these terms and conditions (LC). In line with LC, the seller should carefully look over all draughts to avoid having to pay any discrepancy fees.

Documents:

• commercial invoice

• List of packing materials

• A Bill of Lading

• Certificate of origin.

• Pre-shipment inspection certificate

• Certificate of insurance

• Other documents, if any,

A letter of credit (LC) functions when all documents are taken. The seller sends documents together alongside the initial LC to the bank that advises them. The advising bank will then present the documents to the bank that issued them. The issuing bank then makes the payment to the bank that advised them, while the bank that advises makes payment to the beneficiary, which is the seller or supplier. The issuing bank sends or gives the original documents to the buyer, depending on what the contract says (either after getting paid or if there is a credit).

In the meantime, the buyer calls their CHA and exchanges scanned copies of all shipping documents and gives them the original documents after receiving them.

The buyer’s CHA begins the process of the clearing when the ship arrives at Casablanca port in Morocco. Import duties and port charges must be paid by the buyer or importer. The goods are transported to the designated location (Heavy Stone Warehouse, Casablanca in this case) at the cost of the seller after clearing and accepting the customs clearance documents. The seller arranges for the unloading of goods from the warehouse at Heavy Stones and transfers the goods to the buyer. At this point, the seller’s obligation ends.

It’s all about delivering to a place without load (DPU) as a term incoterms.

All this is about DPU incoterm and we hope the above article would have helped you to understand what is DPU shipping and the operation mode. If you have any consultations required for air freight, ocean freight, customs clearance, and Logistics transportation then we have a very committed team of professionals to help you out. You can get in touch with us at Consolidation Shipping Line any time of the day or drop an email at inquiry@cslindia.net