What Is Delivered Ex-Ship (DES)?

What Is Delivered Ex-Ship (DES)?

Let me explain Delivered Ex-Ship (DES) directly to you. It was a trade term where the seller had to deliver goods to the buyer at an agreed port of arrival. As the seller, I would assume the full cost and risk of getting the goods there. Once they arrived, my obligation ended, and you, as the buyer, took on all further costs and risks. This applied to both inland and sea shipping, often in charter shipping, but it expired in 2011.

Key Takeaways

You should know that DES was an Incoterm for international commercial terms, covering inland and sea shipping, especially charters. It meant the seller delivered goods to a specific port as per the contract, and after that, all obligations moved to the buyer. Discontinued in 2011, it got replaced by Delivered at Terminal (DAT) and Delivered at Place (DAP).

Understanding Delivered Ex-Ship (DES)

In international transportation contracts, we use abbreviated trade terms to detail delivery time, place, payment, risk shift, and who pays for freight and insurance. DES was one such term. It was a legal term with slight variations by country, but generally, the seller stayed responsible until delivery. The seller bore costs and risks to the port, handled shipping payments, and bought insurance.

The seller's duty ended when goods were delivered to the port aboard the ship, not cleared for import. As the buyer, you handled receiving, unloading, and customs clearance.

International Commercial Terms (Incoterms)

Incoterms, short for international commercial terms, are published by the International Chamber of Commerce (ICC) to promote global trade. They foster open markets for goods and services. These terms resemble domestic ones like the American Uniform Commercial Code but differ in meaning, so contracts must specify governing law.

Fast Fact on Related Terms

Another discontinued Incoterm was Delivered Ex-Quay, which required the seller to deliver to the wharf at the destination port—unlike DES, which didn't cover wharves. It could specify duties as paid or unpaid, shifting obligations accordingly.

Replacements for Delivered Ex-Ship

In 2011, DES was replaced by DAT and DAP. With DAP, the seller covers packaging and arranges cargo to arrive safely and on time at the final destination. DAT means the seller handles all transport costs until goods are unloaded at the terminal, plus export clearance. DES differed from Ex Works (EXW), where the seller just makes goods available at their location, and the buyer covers all transport costs and risks from there.

Examples of Delivered Ex-Ship

Consider this: Seller X ships goods to a port in Kennebunkport, Maine. If the ship sinks in a storm midway, Seller X takes the loss since delivery hasn't happened. But if the shipment arrives safely and a storm sinks the docked ship after Buyer Y takes possession, Buyer Y absorbs the loss.

Seller Responsibilities in a DES Transaction

As the seller in DES, you deliver goods to the named port, cover transportation costs, and assume risks until arrival. You're not required to unload or clear customs.

Buyer Responsibilities in a DES Transaction

Your responsibilities as buyer start at port arrival. You bear unloading costs, import duties, further transportation, and secure insurance.

Handling Risk of Loss or Damage in DES

The seller bears risk until goods reach the port; then it transfers to the buyer.

Allocation of Transportation Costs in DES

The seller covers costs to the port; beyond that, it's on the buyer.

The Bottom Line

Delivered Ex-Ship meant the seller delivered to a named port, covering costs and risks until arrival. Then the buyer handled unloading, customs, and onward transport.