Delivered At Frontier (DAF) – The Basics And Incoterms

Delivered at Frontier (DAF)

Delivered at Frontier (DAF) is one of the Incoterms used in international trade to define the responsibilities and obligations of the buyer and seller in a transaction. It is commonly used when goods need to be delivered to a specific frontier or border point, typically between neighboring countries.

Under the Delivered at Frontier (DAF) Incoterm, the seller is responsible for delivering the goods to the agreed-upon frontier or border point, typically at the seller’s own country. The seller must ensure that the goods are ready for export and cleared for export customs formalities.

The buyer, on the other hand, is responsible for arranging transportation from the frontier or border point to the final destination. The buyer is also responsible for import customs clearance, payment of import duties and taxes, and any additional costs incurred after the goods have been delivered at the frontier.

Incoterms

Incoterms are a set of standardized trade terms published by the International Chamber of Commerce (ICC) that define the rights and obligations of buyers and sellers in international trade. They are widely used in contracts for the sale of goods and help ensure clarity and consistency in international transactions.

It is important for both buyers and sellers to understand the specific Incoterm being used in a transaction, as it can have significant implications for their rights and obligations. Delivered at Frontier (DAF) is just one of the many Incoterms available, and its use should be carefully considered based on the specific requirements of the transaction.

Conclusion

What are Incoterms?

Incoterms, short for International Commercial Terms, are a set of standardized rules established by the International Chamber of Commerce (ICC). These rules define the obligations, risks, and costs associated with the delivery of goods from the seller to the buyer.

Incoterms are used to determine who is responsible for tasks such as transportation, insurance, customs clearance, and payment of duties and taxes. They also specify the point at which the risk of loss or damage to the goods transfers from the seller to the buyer.

Why are Incoterms important?

Moreover, Incoterms can impact pricing and profitability. Depending on the chosen Incoterm, the seller or the buyer may be responsible for additional costs, such as transportation or insurance. Therefore, it is essential to choose the most suitable Incoterm for each transaction to ensure a fair distribution of costs.

Incoterms (International Commercial Terms) are a set of standardized rules that define the responsibilities and obligations of buyers and sellers in international trade transactions. These terms, established by the International Chamber of Commerce (ICC), provide clarity and consistency in global trade by specifying who is responsible for various costs, risks, and tasks associated with the transportation and delivery of goods.

Why are Incoterms important?

How do Incoterms work?

Incoterms are divided into groups based on the mode of transportation used in the shipment. Each term specifies the point at which the seller’s responsibility ends and the buyer’s responsibility begins. They also outline who is responsible for arranging transportation, insurance, customs clearance, and other related tasks.

Commonly used Incoterms

Some of the commonly used Incoterms include:

• EXW (Ex Works): The seller makes the goods available at their premises, and the buyer is responsible for all transportation and associated costs.
• FOB (Free on Board): The seller is responsible for delivering the goods to the named port of shipment, and the buyer takes over responsibility once the goods are on board the vessel.
• CIF (Cost, Insurance, and Freight): The seller is responsible for delivering the goods to the named port of destination, including the cost of insurance and freight.
• DDP (Delivered Duty Paid): The seller is responsible for delivering the goods to the named place of destination and pays all import duties and taxes.

Choosing the right Incoterm

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Delivered at Frontier (DAF) is an Incoterm that specifies that the seller is responsible for delivering the goods to a named place at the frontier, typically a border crossing or a customs checkpoint. At this point, the risk and responsibility transfer from the seller to the buyer.

It is important to note that DAF does not include any transportation beyond the frontier, such as customs clearance or import duties. These additional costs and responsibilities are the buyer’s responsibility.

Incoterms

Incoterms are a set of standardized rules that define the responsibilities of buyers and sellers in international trade. They provide clarity and consistency in terms of who is responsible for various aspects of the transaction, such as transportation, insurance, and customs clearance.

There are different Incoterms that cater to different stages of the supply chain, and DAF is one of them. Other commonly used Incoterms include EXW (Ex Works), FOB (Free on Board), CIF (Cost, Insurance, and Freight), and DDP (Delivered Duty Paid), among others.

It is recommended to consult the ICC’s official documentation on Incoterms to fully understand the rights and obligations associated with each term.