Delivered Ex Ship (DES): Understanding the Discontinued Trade Term and Its Distinctions from DAT and DAP

Learn about the discontinued trade term Delivered Ex Ship (DES), its implications for buyers and sellers, and how it compares to modern trade terms like DAT and DAP.

Delivered Ex Ship (DES) is a discontinued term under the Incoterms (International Commercial Terms) guidelines, which was widely used in international trade. This term specified that the seller fulfilled their delivery obligations once the goods arrived at the port of destination. From this point, all risks and costs transferred to the buyer.

History and Discontinuation of DES

Introduction and Usage

The Delivered Ex Ship (DES) term was commonly employed in maritime and shipping agreements. Created by the International Chamber of Commerce (ICC) to standardize international trade practices, DES outlined clear responsibilities for both buyers and sellers during the shipping process.

Discontinuation and Replacement

In the 2010 revision of Incoterms by the ICC, DES was officially discontinued and replaced by terms like Delivered-at-Place (DAP) and Delivered-at-Terminal (DAT). These newer terms are more versatile and comprehensive, adapting to modern logistical practices beyond maritime shipping.

Comparing DES with DAT and DAP

Delivered-at-Terminal (DAT)

DAT is designed for modern multimodal transport, where goods are delivered to a specified terminal. The seller bears all costs and risks until the shipment reaches this terminal. Once the goods are unloaded, the buyer assumes responsibility.

Delivered-at-Place (DAP)

DAP extends beyond just terminals, referring to any specified delivery location. The seller is responsible for all risks and costs until the goods are ready for unloading at the destination. Unlike DES, DAP includes a broader scope of transportation methods and destinations.

Key Points and Applicability

Seller’s Responsibilities

• Transportation Costs: Under DES, sellers covered transportation costs to the destination port.
• Risks During Transit: Sellers bore risks until the ship reached the port of destination.

Buyer’s Obligations

• Unloading Costs: After delivery, buyers handled unloading costs.
• Subsequent Risks: Upon arrival at the port, all future risks shifted to the buyer.

Practical Considerations

While DES was primarily maritime-focused, modern trade often requires flexibility across various transport methods. DAT and DAP cater to this need more effectively.

Examples and Scenarios

Consider an exporter shipping machinery from Japan to the USA. Under DES, responsibility ended once the machinery arrived at a specified U.S. port. With DAP, the seller might ensure the machinery is transported to a particular warehouse in the USA, assuming all risks and costs until it reaches there.

Related Terms

• Incoterms: International rules for the interpretation of trade terms.
• FOB (Free on Board): Seller delivers goods on board a vessel chosen by the buyer; costs and risks responsibility shifts once onboard.

FAQs

Why was DES replaced?

DES was replaced to better accommodate modern logistical practices and multimodal transport requirements.

What is the main difference between DES and DAP?

DES was limited to port deliveries, while DAP includes any specified delivery place.

Can DES still be used in contracts?

While it’s deprecated, parties can use any term as long as it’s mutually agreed upon, but current Incoterms are recommended for clarity and standardization.

References

1. International Chamber of Commerce. “Incoterms 2010.”
2. ICC Incoterms and their Impact on International Trade.

Summary

Delivered Ex Ship (DES) was a significant term in maritime shipping, transferring seller responsibilities upon port arrival. It was discontinued in the 2010 Incoterms revision in favor of more flexible terms like DAT and DAP, reflecting evolving trade practices. Understanding these distinctions helps in navigating responsibilities and risks in international trade agreements.