Lesson 11 DPU part 1

Summary

In this master class, Bob Ronnie delves into Incoterms 2020, focusing specifically on the DPU (Delivered Place Unloaded) rule, explaining its complexities and the challenges it presents to sellers, buyers, and logistics professionals. He explores scenarios involving Full Container Loads (FCL) and Less-than-Container Loads (LCL), detailing the logistics of unloading, responsibilities, and potential complications in different delivery situations. Through his extensive experience, Bob aims to clarify the application of these terms, offering practical insights to help businesses navigate international trade with greater understanding and efficiency.

Takeaways

• 😀 The course is focused on Incoterms 2020, specifically DPU (Delivered Place Unloaded) and its complexities.
• 😀 Bob Ronnie, the course instructor, has extensive experience in international trade and was part of the drafting group for Incoterms 2020.
• 😀 DPU involves the seller delivering goods unloaded at a named place of destination, but it lacks detailed clarity in the original rules.
• 😀 The seller is responsible for unloading goods and ensuring they are delivered to the buyer's premises or a designated location.
• 😀 Full Container Load (FCL) delivery via DPU is not ideal as the seller cannot unload goods at the container yard, making DAP (Delivered at Place) a better option.
• 😀 The seller must manage various logistics tasks, including unloading, returning the empty container, and covering all related costs and risks.
• 😀 For Less than Full Container Load (LCL), the seller must arrange for goods to be delivered from the container freight station (CFS) to the buyer’s premises, also bearing costs and risks.
• 😀 Import formalities, including customs brokerage, are the buyer’s responsibility under DPU, but the seller covers many delivery-related expenses.
• 😀 A major complication in DPU is coordinating the logistics between multiple parties, including forwarders, consolidators, and customs brokers.
• 😀 If the buyer fails to accept delivery, the seller is liable for additional costs like container storage or truck delays, and the buyer might also face issues with export rules in their country.
• 😀 A clear contract is necessary for defining the terms related to delivery times, responsibilities for delays, and cost allocations to avoid disputes between the seller and buyer.

Q & A

What is DPU in Incoterms 2020?

DPU (Delivered Place Unloaded) is an Incoterm where the seller is responsible for delivering goods to a named destination in the buyer's country, unloading them from the arriving means of transport. The seller is also responsible for unloading and all costs until the goods are delivered at the buyer's premises or another specified place.

Why is the explanation of DPU spread across three lessons?

DPU is a complex and contentious rule that requires in-depth understanding, especially regarding delivery obligations, costs, and logistics issues. Breaking it down into three lessons ensures a comprehensive explanation of the different challenges and responsibilities involved.

How does DPU differ from DAP (Delivered at Place)?

While DPU requires the seller to unload the goods at the destination, DAP simply mandates the seller to deliver the goods to a named place in the buyer's country without specifying unloading. In DPU, the seller bears the unloading responsibility, whereas in DAP, it is up to the buyer.

What is the role of the seller in the delivery process under DPU?

The seller must arrange for the goods to be delivered to the named destination, unload them from the transport, handle all terminal charges, and ensure the return of any containers if applicable. The seller also bears the risk and cost until the goods are delivered unloaded.

What potential problems should the seller be aware of when delivering under DPU?

The seller should be aware of issues such as coordinating logistics at the destination, possible delays in customs clearance, container detention charges, truck delay charges, and the buyer's requirements for insurance and safety standards for unloading personnel.

What does the seller need to consider when delivering an FCL (Full Container Load) under DPU?

When delivering an FCL under DPU, the seller must be aware that they cannot unload the goods at the container yard. The seller is responsible for transporting the container to the buyer’s premises, unloading the goods, and handling any charges related to delays or storage at the terminal.

What is the role of the buyer when goods are delivered under DPU?

The buyer must arrange for import formalities, including customs clearance, and is responsible for any storage, detention, or additional charges that occur after the goods are unloaded. The buyer must also ensure they are available to accept delivery and may need to coordinate unloading at their premises.

What are the key risks associated with DPU delivery?

The key risks include the potential for delays in delivery, issues with unloading equipment and personnel, and complications related to container detention, storage charges, or customs procedures. Additionally, if the buyer refuses delivery or fails to complete the necessary formalities, the seller may face additional costs.

Why is it important to have clear terms in the contract when using DPU?

Clear terms in the contract help prevent misunderstandings between the seller and the buyer regarding responsibilities, costs, and timing. For instance, the contract should specify unloading procedures, free time for containers at the terminal, and who bears the risk for delays or charges.

What complications arise from using DPU for LCL (Less than Container Load) shipments?

In LCL shipments, the seller must handle the unloading of goods from a consolidated container, which can lead to additional complications. These include coordinating with customs brokers, managing storage charges at the container freight station (CFS), and dealing with potential issues in tracking the goods through the consolidation process.