2.10 Incoterms & Liability

Logistics costs and risks are defined by International Commercial Terms (Incoterms). Misunderstanding these terms results in unexpected freight bills and uninsurable losses during transit. This section mandates the specific Incoterms to be used for procurement and shipping.

2.10.1 Transfer of Risk

• ExWorks (EXW): Buyer owns the goods the moment they leave the Supplier's dock. Buyer pays freight and insurance. Common for Customer Pickups.
• DAP (Delivered at Place): Supplier owns the goods until they arrive at Dannie's dock. Supplier pays freight. Preferred for Procurement.
• DDP (Delivered Duty Paid): Supplier pays all freight, duty, and tax. Preferred for International Procurement.

2.10.2 Freight Forwarder Management

• Consolidation: Use designated forwarders to consolidate small shipments into larger, cheaper movements.
• Insurance: Shipments valued over $10,000 must be explicitly insured if moving under EXW terms.

Final Checklist