CIP is one of the Incoterms 2010 delivery terms commonly used in import and export activities. Let's join Giaiphapdonggoi.net to find out what CIP conditions are? And what are the obligations of each party? Please!
Table of Contents [Hide]
1. What is the CIP condition?
A CIP term stands for “Carriage and Insurance Paid To” where the seller pays the freight and insurance to deliver the goods to a party nominated by the seller at an agreed place. The risk of damage to or loss of the goods in transit passes from the seller to the buyer as soon as the goods have been delivered to the carrier or designee. It is comparable, but different from Cost, Insurance and Freight (CIF).
What is the CIP condition?
Carriage and Insurance Paid for (CIP) is one of 11 Incoterms, a series of globally accepted trade terms published most recently by the International Chamber of Commerce in 2010.
2. Obligations of Buyer & Seller under CIP
According to the rules of Incoterms 2020, CIP means that the seller is responsible for delivering the goods to the first carrier or another person specified by the seller at the named place of delivery, at which point the risk passes to the buyer. The seller is responsible for the costs of shipping and insurance related to the carriage of the goods at least to the named place of destination.
CIP is one of two Incoterms 2020 rules that determine which party must purchase insurance (the other is CIF - Cost, Insurance and Freight).
With the release of the Incoterms 2020 rules, the amount of insurance required under the CIP has increased to at least 110% of the value of the goods as detailed in Clause A of the Goods Terms instead of the lower amount specified in Clause 1 of this Article. specified in Paragraph C, was required for the CIP in the 2010 rules and is still required for the CIF. This is because CIP is most commonly used for higher value manufactured goods than for conventional goods shipped under CIF.
Since this is a standard export transaction, it is the responsibility of the seller or their agent to submit Electronic Export Information (EEI) through AESDirect on the ACE portal.
>> See more pet straps
Obligations of Buyer & Seller under CIP
Seller's Obligations
Perform all duties according to the delivery conditions specified in the contract.
Hand over the goods to the carrier on time as agreed in the contract.
To conclude or organize the carriage of goods from the agreed point of delivery to the named place of destination.
Operate according to all transportation related security requirements for transportation to destination.
Packing and marking the goods.
Assist buyers in obtaining any documents required for transit and import clearance formalities.
Buyer's Obligations
Recieve.
Carry out and pay import procedures.
Get the necessary documents for import and transit.
Assist the seller, upon request, risk and expense, in obtaining any documents necessary for export formalities.
Inform the seller of the place and date of delivery.
>> Learn more about Pet Straps
3. How CIP . Condition Works
Shipping and Insurance Paid for (CIP) are often used in conjunction with a destination. So, for example, CIP New York means that the seller pays the shipping and insurance fees to New York. As is the case with “Paid Toward Transport” (CPT), freight or freight with CIP refers to shipping charges for any accepted mode of transport, such as road or rail. , sea, inland waterway, air or multimodal transport is involved in a combination thereof.
For further context, consider this theoretical scenario: LG in South Korea wants to ship a container of tablets to Best Buy in the United States. According to CIP, LG is responsible for all freight costs and minimum coverage for delivering the tablet to the carrier or designee for Best Buy at the agreed destination. Once the shipment is delivered to the carrier or person nominated for Best Buy, LG (the seller)'s obligations are completed and Best Buy (the buyer) assumes the full risk and responsibility for the shipment.
4. Additional coverage under CIP
Since the seller is only obligated to purchase the minimum amount of insurance to transport the shipment to its destination, the buyer should consider arranging additional insurance to protect the shipment from peril. Otherwise, the buyer may suffer great loss if the shipment is damaged or lost due to some adverse event that is not covered by the minimum insurance provided by the seller.
The buyer may require the seller to provide additional insurance and depending on the relative bargaining position of the buyer and the seller may negotiate for the seller to bear all or part of the cost of the insurance.
that additional risk.
5. Advantages and disadvantages of CIP
CIP first appeared in Incoterms® 1980 as Carriage of Cargo and Insurance Paid to Persons, but was abbreviated in the 1990 rules.
The only difference between a CPT and a CIP is that the seller of the CIP must contract for insurance against the buyer's risk. Coverage has been changed in Incoterms® 2020 to the maximum of Institute Cargo Clauses (A), (Airmail) or similar, for 110% of the CIP value or similar - which is sometimes called “all risk”.
Above is some information about CIP conditions that Giaiphapdonggoi.net wants to share with you, hopefully it will help you somewhat. Good luck!
Check out this article on the same topic:
What is COO? What is the difference between CEO, CFO, CCO and COO?
What is SWOT? When and why should you perform a SWOT analysis?
