Lesson 13 DPU part3

Summary

In this lesson, Bob Ronai explains Incoterms 2020, focusing on the DPU (Delivered at Place Unloaded) rule. He discusses the obligations of both the seller and the buyer regarding notices, transport documents, cost allocation, and insurance. He highlights potential issues with using DPU in international shipping, particularly in relation to letters of credit. Bob emphasizes the importance of understanding these rules for successful trade practices, based on his extensive experience in the field. The session also previews upcoming lessons on various other Incoterms, offering valuable insights for better trade management.

Takeaways

• 😀 DPU (Delivered at Place Unloaded) replaces DAT (Delivered at Terminal) in Incoterms 2020, but it has limitations in cross-ocean transport.
• 😀 The seller is responsible for providing necessary notices to the buyer regarding the delivery of goods, especially at terminals or the buyer's premises.
• 😀 The buyer must inform the seller about the time and place of delivery, ensuring a smooth process of taking delivery.
• 😀 The seller must provide the buyer with the necessary transport documents at their cost, and the buyer must accept them for taking delivery.
• 😀 Delivery at a terminal requires specific documents like an original bill of lading or seaway bill, whereas delivery at the buyer's premises might not need these documents.
• 😀 The allocation of costs is clearly defined: the seller pays for costs up to delivery, and the buyer covers costs after delivery, including import clearance.
• 😀 Neither the seller nor the buyer is obligated to arrange insurance, but the seller should consider it for their protection, especially if the goods are lost or damaged.
• 😀 The use of letters of credit (LCs) does not align with the DPU Incoterm because LCs are based on pre-delivery requirements, while DPU involves delivery after receipt of goods.
• 😀 The Incoterm DPU can create complications in international shipping, particularly for Full Container Loads (FCLs), Less than Container Loads (LCLs), and airfreight.
• 😀 The speaker emphasizes that the current Incoterms rules should be carefully understood and used to avoid misunderstandings or conflicts, particularly with DPU.
• 😀 Future lessons will cover a variety of other Incoterms like EXW, FCA, CPT, DAP, and others, aiming to clarify their application and relevance in trade.

Q & A

What is the main focus of this lesson in the video?

The main focus of this lesson is to explain the DPU (Delivered at Place Unloaded) Incoterm in detail, specifically covering various aspects like notices, transport documents, cost allocation, insurance, and letters of credit.

What is the role of notices under DPU according to the script?

Under DPU, the seller must provide the buyer with notice when goods are delivered or about to be delivered to the destination terminal or the buyer's premises. The buyer, in turn, must notify the seller when and where they want the goods delivered.

What documents are required for the buyer to take delivery of goods under DPU?

The required documents vary depending on the delivery method. For terminal delivery, the buyer needs an original bill of lading, seaway bill, or express release. For delivery to the buyer’s premises, no transport document is necessary, but a copy of the transport documents is needed for import formalities.

How are costs allocated between the seller and buyer in DPU?

The seller is responsible for all costs related to the goods and their transport until delivery at the destination. The buyer, on the other hand, is responsible for all costs after delivery, including import duties and costs associated with document assistance.

Does the seller have any obligations regarding insurance under DPU?

While neither the seller nor the buyer is required to contract insurance, it is wise for the seller to arrange insurance, as they carry the risk if the goods are lost or damaged during transit.

Why is DPU incompatible with letters of credit (LC)?

DPU is incompatible with LCs because LCs typically require documents to be presented before delivery. However, DPU involves delivery of goods first, making it difficult to comply with the document presentation requirements of an LC.

What was the change from DAT to DPU in the Incoterms 2020?

DPU replaced DAT (Delivered at Terminal) in the Incoterms 2020. The change was made to clarify that DPU can apply to any place, not just a terminal, and it includes all modes of transport.

Why does the speaker consider DPU potentially dangerous for cross-ocean transport?

The speaker considers DPU potentially dangerous for cross-ocean transport because it has been expanded beyond its original scope (previously only for terminals) and now covers all modes of transport, which may complicate international shipping logistics.

What is the speaker's recommendation regarding the use of DPU?

The speaker recommends avoiding the use of DPU for FCL (Full Container Load), LCL (Less than Container Load), or airfreight, as it does not align well with typical logistics practices for these types of transport.

What will be covered in future lessons as mentioned in the video?

Future lessons will cover a range of other Incoterms, including FCA (Free Carrier), CPT (Carriage Paid To), CIP (Carriage and Insurance Paid To), DAP (Delivered at Place), DDP (Delivered Duty Paid), as well as other terms like FAS, FOB, CFR, and CIF.