“General what!?!?!, we hear you say…What has ‘that’ got to do with me??”

General Average is important to understand when any goods are transported by Sea. Introduced long before the days of Computers and the Internet* this Law can be called into play when things go wrong and covers damage and salvage costs not only for those with cargo on board which is directly affected, but the costs are spread equally with ALL those with cargo sailing on a ship.

*Wikipedia says: “A form of what is now called general average was included in the Lex Rhodia, the Rhodes Maritime Code of circa 800 BC”

What are the chances of this happening? The answer is: Very remotely. However, you have to understand that it happen.

If you choose not to take out insurance then the chances are ‘Nothing would happen’. However, if something DID happen and you didn’t take out insurance, then it could prove very costly. ukimports

Official explanation: “Delivered Duty Paid” means that the seller delivers the goods when the goods are placed at the disposal of the buyer, cleared for import on the arriving means of transport ready for unloading at the named place of destination. The seller bears all the costs and risks involved in bringing the goods to the place of destination and has an obligation to clear the goods not only for export but also for import, to pay any duty for both export and import and to carry out all customs formalities.

Simplified explanation: This usually means that you have paid the seller an all-in price, for the goods and their delivery to your door (without having to pay any charges to anyone else). ukimports

Official explanation: “Delivered at Terminal” means that the seller delivers when the goods, once unloaded from the arriving means of transport, are placed at the disposal of the buyer at a named terminal at the named port or place of destination. “Terminal” includes a place, whether covered or not, such as a quay, warehouse, container yard or road, rail or air cargo terminal. The seller bears all risks involved in bringing the goods to and unloading them at the terminal at the named port or place of destination.

Simplified explanation: This usually means that the seller will be arranging and paying for the goods to arrive at the destination airport or Port.

‘The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage. The buyer should note that under CIF the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements.”

Simplified explanation: This usually means that you, the buyer/receiver have paid the seller, the cost of the goods, Insurance during transit and the freight charges to the UK. All cost costs incurred once in the UK are payable by yourself. ukimports

Official explanation: “Cost and Freight” means that the seller delivers the goods on board the vessel or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the vessel. the seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.

Simplified explanation: Exactly the same as ‘CIF’ above without your goods being insured.

Official explanation: “Carriage and Insurance Paid to” means that the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such place is agreed between parties) and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination.

The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage. The buyer should note that under CIP the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements.

Simplified explanation: This usually means that the seller will be paying for the goods to be shipped, and arranging insurance cover, up till an agreed place (usually an agreed address between you, the buyer/receiver and the seller).

Official explanation: “Carriage and Insurance Paid to” means that the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such place is agreed between parties) and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination.

The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage. The buyer should note that under CIP the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements.

Simplified explanation: This usually means that the seller will be paying for the goods to be shipped, and arranging insurance cover, up till an agreed place (usually an agreed address between you, the buyer/receiver and the seller).

Official explanation: “Free On Board” means that the seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the vessel, and the buyer bears all costs from that moment onwards.

Simplified explanation: This usually means that the seller has only paid for the goods to be delivered in the port or airport of departure in the Country of Origin. All freight costs and any other charges will need to be arranged and paid for by yourself, the buyer / receiver. We can assist you with this, so why not contact our Imports Team for more information. ukimports

Official explanation: “Free Carrier” means that the seller delivers the goods to the carrier or another person nominated by the buyer at the seller’s premises or another named place. The parties are well advised to specify as clearly as possible the point within the named place of delivery, as the risk passes to the buyer at that point.

Simplified explanation: FCA is identical to FOB, except for the fact that it usually means that the seller will arrange for the goods to be delivered to the port/airport/cargo shed instead of you, the buyer, having to pay for it to be collected.

Official explanation: “Ex Works” means that the seller delivers when it places the goods at the disposal of the buyer at the seller’s premises or at another named place (i.e. works, factory, warehouse, etc.). The seller does not need to load the goods on any collecting vehicle, nor does it need to clear the goods for export, where such clearance is applicable.

Simplified explanation: This usually means that it has been agreed that the shipper is not paying for anything other than the sale of the goods. The responsibility for the collection of the goods from the supplier’s premises, export documentation including any local Customs declaration and handling costs, and the shipping to the UK, will be the arranged by the buyer. Again, we can assist you with this, so why not contact our Imports Team.