Sealane would have to show the loss occurred because of 1) the fault of the shipper, EMCO (because the purchase is EXW
), 2) defective packing or marking, 3) inherent vice of the goods, 4) an unavoidable work stoppage, 5) a nuclear incident, or 6) any other cause which could not be avoided, or whose consequences could not be prevented by the exercise of reasonable diligence.(3) The MTC 1980 would permit Sealane to escape liability by proving it "took all measures that could reasonably be required to avoid the occurrence and it consequences."(4) The new UNCTAD/ICC Rules take a similarly principled approach.
Story by MC3 Shannon burns Photos by MC2(EXW
) Todd Frantom and MC3 Shannon Burns
For example, one notable Incoterm that makes sense in other countries, but not for export shipments from the U.S., is Ex-Works (EXW
Shipment terms for delivery of goods--Strictly speaking, the commonly used shipping terms (INCOTERMS such as FOB, CIF, and EXW
) do not dictate the location in which the title to the goods transfers from seller to buyer; rather, they indicate where the risk in the goods transfers.
For example, if you are shipping "ex-works" (EXW
), you are required to make the merchandise available at your warehouse for pickup by the buyer, but you have no control over the routing of the transaction.
importer to buy EXW
? If so, possession of the goods is taken as they sit unloaded in the foreign nation, and the importer accepts the responsibility to load them into the container and clear outbound foreign Customs and inbound U.S.
* For INCO TERMS, try for EXW
, as it represents the least obligation for the seller.
"Incoterms" a/k/a "International Commerce Terms" developed by the International Chamber of Commerce, which describes them as "standard trade definitions most commonly used in international sales contracts." The latest Incoterms in effect are "Incoterms 2000." Of the 13 different Incoterms, the best known are EXW
(Ex works), FOB (Free on Board), CIF (Cost, Insurance and Freight), DDU (Delivered Duty Unpaid) and CPT (Carriage Paid To).
(These can be found at: http://www.iccwbo.org/index_incoterms.asp.) Among the best known Incoterms are EXW
(Ex Works), FOB (Free on Board), CIF (Cost, Insurance and Freight), DDU (Delivered Duty Unpaid), and CPT (Carriage Paid To)." They describe what aspects of the transportation process are required to be paid for by the seller and buyer, and where responsibility for the products end for the seller and begin for the buyer.
Assuming the banker is willing to accept as evidentiary documentation a signed truck bill for an EXW
transaction or other signed document for an "F" Incoterm sale, this can provide much greater flexibility.