All right, it is 10:00 A.M., so we'll get started. For those of you who have just joined, thank you for joining us today for our Incoterms Basics webinar. As you can see, we have a poll for you to answer. My name is Sarah Moss, and I am the Regional Sales Operations and Marketing Lead for the Midwest, and I am based in Minneapolis, and I'll be your webinar host for today. Before we begin, please review our short webinar disclaimer. You can see that on the next slide. Then I do want to cover a couple of items to note before we get started. Today's webinar will be about 60 minutes in length. There will be about 45 minutes of content presented, with 15 minutes at the end for Q&A.
All attendees will be on mute. We ask that if you have a question on what's presented today, please type that question into the Q&A window only because we have disabled the chat. We will address as many questions at the end of the webinar as possible, but if we don't get to your question, we will follow up after to make sure that it's answered. As shown on the screen, today's webinar will be recorded, and you will receive a pop-up notification alerting you that the recording has started in just a moment. After the webinar concludes, you will receive an email which includes a short survey that we would like you to complete with your feedback. After you complete the survey, you will receive an email with the landing page link to the presentation material.
So we'll start recording, and I'd like to introduce our speaker for today's Incoterms Basics webinar. Jamie Childress is our Regional Risk and Insurance Manager for the North Central Region, and she is based in our Cleveland office. Jamie has been with Expeditors for 19 years, and she has held multiple roles within the Cleveland District. She has her bachelor's in communication from Cleveland State University, and she started out in our Customs Brokerage Department, and then for the past 12 years, she has been a part of the account management team. And then a little over a year ago, she took the leap into risk and insurance, and she hasn't looked back. And Jamie also has her IATA/FIATA certification. So one last reminder that all questions should go into the Q&A window, and with that, I'll turn it over to Jamie.
All right, thanks, Sarah. Hello everybody. I want to thank you for joining the webinar today as we talk through the Incoterms Basics. I was sharing with the team today that I was practicing with my son last night, who's 11, and I said, "Do you want to learn about Incoterms?" And he was like, "Sure, just put it up on the TV. Let's go through, you know, go through the presentation." I said, "Okay." And after about 10 minutes of trying to get it onto the TV, I could not figure it out and asked him for help.
And then, you know, he shared, you know, asked me, "How long is this going to take?" And I was like, "It's about 45 minutes of content." And he said, "I don't think I can sit through that." And I was like, "I don't blame you, but just hang in there." So I'm asking all of you out there to hang in there with me as we jump into the world of Incoterms. I promise we'll have some jokes in there, and it'll be very informative. So for those of you who are familiar, who are not familiar, Expeditors and our global network, we were founded in 1979. We are a non-asset-based organization with over 340 office locations globally and with 18 plus employees and counting.
As I head into my 20th year, I can tell you it's, you know, there is not one person that will not help you out in this network, so it's good to have this giant network of connections, and we're located in 100 plus countries, okay. We are traded on the New York Stock Exchange as EXPD, okay, so some of you may be familiar with our wholly owned subsidiaries such as Cargo Signal, Tradewin. We also have Expeditors Cargo Insurance Brokers, which we reference as ECIB. This is another wholly owned subsidiary of Expeditors. We are a specialty broker in this avenue where we only work with cargo insurance and claims management as a TPA, so very, very niche. We are focused on marine cargo insurance. We don't worry or deal with so much as the property and casualty, workers' comp, but ECIB is specific in that cargo lane.
We're licensed in the U.S., Mexico, and Amsterdam. We have operational teams in Seattle and Amsterdam, and our team at corporate, our cargo claims team, handles roughly over 27,000 cargo claims annually. And this can be claims such as liability claims, insurance claims, so all the different types of claims that we see. Okay, so what are we looking at here? This is the ONE Apus and beyond. And in 2020, it encountered some rough waters, which ultimately about roughly 1,800 containers had to be thrown overboard. And then it had to; it was on its way from China to Los Angeles. When it encountered the rough seas, it had to divert and go to Kobe, Japan, where they could fix, you know, the containers that had fallen.
So in addition to those 1,800 containers that were thrown overboard, there were roughly about 1,000 additionally that were damaged that needed to be removed from the vessel once the freight arrived in Japan. It's been about three months being worked and getting those containers offloaded, so you're probably wondering what helps guide those, you know, what helps decide the cost, the risk, the obligation between the buyer and seller when something like this happens, when it's on its voyage, right? Well, I'll give you a hint. It's Incoterms. That's what we're talking about today, so Incoterms is designed to help decide between the buyer and the seller who's responsible for the cost, risk, and obligation of the cargo and transit. Okay, so what I want to show here is this is a pretty simple supply chain, right?
The goods, you know, seller manufactures the goods, puts it on the truck, it gets to the consolidator, you know, and it moves along the supply chain. Once the main carriage is finished, then on the destination side, same thing, unloaded off the vessel, you know, move throughout the process. What's important to call out here is, you know, this is reflecting a simple supply chain, but it's also reflecting that there are many touch points within your supply chain, so it's very important to understand who's responsible for that cost, the risk, the obligation, and this is where we will get into more in depth of Incoterms, and I think we have a poll to put up here, so since the inception of Incoterms in 1936, how many revisions have been made? Four, six, eight, or to infinity and beyond, as Buzz Lightyear likes to say. Okay.
Give it another minute or so. Get those answers in. Okay. All right. So with that, the poll looks like we've got a fair spread here, but if you guessed eight or if you answered new correctly eight, then you were spot on. So we'll get into depth here on those Incoterms. Oops. Okay. So Incoterms is international commercial terms, first developed by the International Chamber of Commerce in 1936, and then revised an additional eight times, as noted in the poll. So with that, you know, we've noticed a cadence of about every 10 years. So we anticipate 2030 seeing some revisions there. And these Incoterms are comprised of three letters: EXW, FOB, DDP. I'm sure all of you are pretty familiar with those terms.
Again, the purpose of the Incoterms rules is to provide that interpretation of who's responsible between the buyer and the seller for that cost, that risk, and that obligation. Okay. What don't Incoterms do? They are not law. If they are to be held up in the court of law, it's important to call those out and be as specific as possible in the contract, whether that be the sales order or purchase order. Calling that out specifically would be very important. They do not address passage of title. They do not address recognition of revenue. Drop shipments, they do not really come into play with drop shipments. That is a question we get, a common question that we receive.
You know, drop shipments, because they're so complex, we highly recommend that it is important to put that out every step, whose responsibility is what within the contract, because there are different legs and different processes that are followed when you're working on drop shipments. And again, if there's any additional conversation that you would like to have surrounding drop shipments, I definitely can be contacted, and we can work to discuss that further. So how to use Incoterms properly. There are 11 total terms, only 11, seven of which are omni-modal, which means they can be used for planes, trains, automobiles, and four of which are ocean only. They help to facilitate trade. And again, I'm going to sound like a broken record here, but it divides the cost, the risk, the obligation between the buyer and the seller. It reduces the potential for misunderstanding.
What I mean by that is making sure that you're putting in detail, you know, when you're calling out the Incoterms and its name, named place, you want to be as specific as possible. For example, if you were to say FCA Cleveland, is that Cleveland, Ohio, Cleveland, Georgia, Cleveland, Tennessee? It's important to call out, you know, that as specific as possible. Okay. You'll see that last note that says the Incoterms plus named place, point report, and Incoterms 2020. This is very specific, right? It's even calling out the Incoterms 2020 because there are cases where some terms have been, you know, removed from Incoterms, but companies are still able to use that if they call out, say, for example, Incoterms 2010. You know, that's something as long as you're as specific as possible, I mean, the better. And you can use those older terms as well.
These are the classes of the Incoterms. These are all 11 Incoterms called out. We have the seven, which are for all modes of transportation. You have the four on the bottom, which are ocean only. Okay. For those ocean only Incoterms, it's one thing I would like to point out is the mode of transport that falls underneath those ocean only terms. For example, for CIF, this rule is to be used only for sea or inland waterway transport where more than one mode of transport is to be used. I'll break that down a little bit where more than one mode of transport is to be used.
So take for example, you have freight leaving your warehouse and you're contracting a trucker to pick up that freight, who's then going to take it to the CFS or rail yard and then is going to turn it over to the port. You know, there are multiple modes of transport being used in that case when you're looking at CIF, okay? So where more than one mode of transport is to be used, which will commonly be the case where goods are handed over to a carrier at a container terminal like I just walked through, the appropriate rule to use is CIP rather than CIF, okay? So goods that are in containers, it's recommended that you use one of the omni-modal terms. Now, nobody panic because I know I've gotten this question in the past because we do see FOB used quite often in the ocean world.
That's okay. Again, these are not law. These are just rules to help with the facilitation of trade. There are guidance notes to help ensure that you're using the Incoterm for the mode of transport that you are using. An example of when you would use the ocean only term, say for FOB, would be where there were bulk loading of containers. That container is going to already be the vessel and you're actually loading the freight onboard the vessel. That's a good case of ocean only. Okay. I bet that was a lot of information. Any questions, you know, feel free to add into that Q&A and we will try to get to those or reach out after. Okay. Now we're going to dig into each of those 11 Incoterms. EXW will be the first one that we'll go through.
But before I get into that, I wanted to touch base on, you know, looking at the E and the F terms and the C and the D terms. The E and the F terms, you want to look at the main carriage is always going to be paid for by the buyer. So kind of think of that as in your collect terms. Those C and D terms, the named place is going to be at destination with the main carriage being paid for by the seller. Okay. So I will go in and then EXW. So if we look at that arrow, and we'll see that arrow kind of travel a little bit as we get through all the Incoterms.
But looking at this EXW, so that named place is going to be on the seller side, which means the buyer is responsible for the cost, the risk, and the obligation at the seller's facility. Okay. There is no obligation on the seller in this case to organize the export clearance. That would be the buyer's responsibility. There's also the loading of the freight at the seller's facility. That would be the responsibility of the buyer. So there is a risk there. That risk transfers over to the buyer. And what I want to point out here is I know that, you know, you have specific contracts and relationships with your sellers. So when using EXW, yes, if you have that relationship and, you know, the seller has the capability and, you know, to load the cargo, we do see that.
So, you know, you have a relationship with your seller. You're working on getting that loaded. But just knowing that that responsibility falls on the buyer is something I just want to point out. Okay. FCA. So your named place is going to be on the seller side again here. And again, that arrow where, you know, between the seller's facility and the carriage to customs to the port, that arrow can slightly move, whether it be at the seller's facility or the CFS. But know that the seller is responsible to get it to that named place and responsible for those charges. And once arrived at that named place, the buyer's cost, risk, and obligation sets in, and they are responsible for that final piece. Okay. And the seller in this case would be responsible for the export clearance. Okay. CPT. Okay.
So this one, we can see the line has changed a bit, right? We have two arrows that we're working with. And it is the seller's responsibility for handling the risk to that named, to the carriage paid to, that first point of contact. So that first point of carriage, that risk is going to transfer over to the buyer. And then the seller is responsible to get the freight to the named place on the buyer's side. So the cost and obligation. And from there, that transfers, the cost and obligation transfers from the seller to the buyer. Okay. CIP. So CIP is similar to CPT, except the buyer is requesting the seller purchase insurance on their behalf. One note that we like to call out here is if you're dealing, you have a shipment coming from China to the US, right?
The buyer here in the U.S. is saying, "You need to purchase insurance on my behalf." You know, you're dealing with insurance companies. If something were to happen, loss or damage while in transit, then you're dealing with an insurance company that is in a foreign country. I know it can be challenging, you know, trying to figure that out and understanding the requirements or what is needed. So just one thing that we like to share when looking at that. But this is similar to CPT, just insurance is requested to be purchased on the buyer's behalf. Okay. DAP. So DAP, that named place will be on the buyer's side. And so the seller is responsible to get it to that named place. Okay. So they're responsible for the cost, the risk, the obligation, all the way to that named place on the buyer's side.
From there, the risk, the cost, the obligation transfer over to the buyer. So the buyer is responsible to get it to their warehouse, their final destination. So DPU. DPU also has the named place on the buyer's side, delivered at place, so that named place, but the seller is responsible for unloading of the freight. The buyer is responsible for the clearance. So the seller is not responsible for that, but they are responsible to get that unloaded at that named place.
So that is where that communication really needs to come in, you know, into play between the buyer and the seller to understand, you know, is everything in place for its clearance so that the seller can move forward with unloading of the freight. So definitely key so that there's no misunderstanding, right? Okay. So DDP. DDP, I could spend, I could give so many examples on this one.
But DDP is basically, you know, that named place will be on the buyer's side. The seller is going to take care of everything. The whole kit and caboodle. Everything is going to be, you know, the seller's responsibility, including duty. So what I'd like to share here is if you look at it from, you know, U.S. going into China, for example, if you're exporting out of the U.S. or Madagascar or wherever, are you aware of the duty rate on pencils into Madagascar? I asked my son this and he didn't know. And then he kind of looked at me like a deer in headlights and I was like, "You're not supposed to know what the duty rate into Madagascar of pencils is." So no pressure. I don't know the duty rate. We can find out certainly.
But my point here is when you're exporting into a foreign country or somewhere that you're not familiar with, you don't necessarily know all the country requirements. That's very important. Some countries could require you to have an entity in there to be able to import into and pay the duty or obtain the duty back, right? So it's definitely something to consider when using DDP. If you're going to be going into a foreign country, you want to understand those countries' requirements, right? And then similar to, you know, reverse that, right? If you're coming out of a foreign country into the U.S. and you're saying DDP and you've talked to your seller and your seller says, "Hey, I'm going to send this freight to you. DDP, I will take care of everything.
You'll get your freight in, you know, a month's time." That month comes and goes and where's the freight, right? So there's a lack of visibility as well when using that DDP. So it's important, again, communication between the buyer and seller and really understanding what's being signed up for there. So now we'll get into the ocean only terms. So we're getting into the last three, or I'm sorry, the last four Incoterms. So FAS is free alongside ship. So it is the responsibility of the seller to make sure that the freight is delivered at the port alongside ship, okay, safely. And that is where the risk, the cost, and obligation then transfer over to the buyer. Okay. FOB, that named place will be on the seller's side.
It's the responsibility of the seller to get the cargo safely onboard the vessel where that cost, risk, and obligation then transfers over to the buyer. Okay. CFR. Again, we've got that broken arrow, right? It is the responsibility of the seller, you know, to get it safely alongside the ship. That risk would then transfer over to the buyer. And then the seller would be responsible for the cost and the obligation of that main carriage to that named place on buyer's side where then that would transfer over to the buyer and the buyer would be responsible for the customs clearance, the final delivery inland to their warehouse. Okay. CIF. Similar to CPT and CFR, you know, the buyer is requesting insurance to be purchased on behalf of them.
So again, the challenges we talked about earlier with, you know, having to work with an insurance company in a foreign country, not understanding regulations, just something to be aware of. But just having that communication between the buyer and the seller is really important when working with CIF. Okay. Some additional information. One thing I did want to call out, and hopefully you can see this, it's not blurred, is the Incoterms book. I purchased it on Amazon. It's a very, I mean, it's a book that I hold near and dear and don't let anybody take, okay? Because it is just so helpful. It breaks down, I mean, the rules of the seller, the rules of the buyer. It really just breaks apart each Incoterm. I highly recommend having at least one copy within your facility to be able to reference.
Again, I'm always here as a reference as well, but I definitely recommend this book. Okay, and again, the drop shipment reminder. I'm happy to talk further if anybody has any questions because I know that is a common question we get, you know, what, how do Incoterms work with drop shipments? Because there's so many different legs and you've got people in the U.S. and then working with two other countries, it can get complicated, so I'm definitely here for help and guidance. Okay, so we have another poll here before we get into carrier liability. How do you currently handle your risk? This is a question that we love to understand and ask our customers.
You know, we are day-to-day, our operations teams are working with your freight and your questions and, you know, we want to understand how that risk is handled so that we know and can update, you know, our internal SOPs, right? So that we know, you know, what next steps to take or have the conversation, so really important to understand how companies handle their risk. Do you purchase it transactionally? Do you have a policy, you know, layered approach? Or do you take that risk in-house, right? So we'll give another minute or so. Okay. All right. Let's see the answers. Okay. So buy from a forwarder. I have a policy. Okay. A good spread. Thank you for sharing. All right. So now we'll get into carrier liability, and this is something that we enjoy, you know, sharing our knowledge. Excuse me. There you go. Freight Carrier Legal Liability.
Carriers are allowed to limit their liability. These are the standards in the industry that we follow, Expeditors follows. It's broken out by mode. Okay? An important note to make here is carriers must be negligent in causing the damage in order to be held liable. Okay? What do those limits of liability look like? International Ocean is limited to $500 per customary freight unit or if you've heard customary shipping unit. What does that mean? So and what is a customary shipping unit? Customary shipping unit is basically the smallest number listed on the bill of lading. Okay? For example, you have one container with 12 pallets, 1,500 boxes. Okay? The carriers, if found liable, are going to look at, okay, there was only one container because that's the smallest number listed on the bill of lading, right?
They could, if found liable, provide up to $500 per that container. Now I'm going to go out on a limb and say that most containers are valued over $500 in the freight world. So it's not a lot. And they're allowed to limit their liability because, again, they charge based on the space and the weight and not the value of the goods. Okay? International air is limited to 22 SDR per kilo, which SDR stands for special drawing rights. And it's about an average of six different currencies that equate to $30 US per kilo. Okay? And then trucking and warehousing, the standard liability is $0.50 per pound. And then for warehousing, it's $50 per lot max. I also like to say this joke. I got this from one of my mentors. $50 per lot max. What's a lot? It's more than a little.
But no, what's a lot? A lot is basically that pallet position. So think about if you're in the warehousing and you're moving a pallet in, a pallet out, you could, you know, if there was damage, loss or damage, you could only get $50 per lot. Okay? Okay. So again, just to bring that home, the value and the type of goods has no impact on the freight charges or the carrier's liability. So they charge based on the space and the weight, not the value of the goods. Okay? Now you guys might have seen the explosion following this, but we'll get into this. One thing that we like to share, some pictures because they're very impactful, right? Cargo at rest is cargo at risk. I say that all the time.
I never thought I'd be saying that as much as I do now, but here we are. You know, what happened here, right? There was a container of magnesium on board the vessel. And for those of you who don't know or are knowing now, when magnesium gets wet, it can cause quite an explosion. So the vessel on the water carrying these containers managed to get wet and an explosion occurred because of that. All right. This vessel had a couple of containers full of fireworks on it that ignited while in transit. And as you can see atop the vessel, the container actually flew or exploded, rather, right to the top of the vessel. So definitely not a great day for this vessel. Okay. So this one, this vessel encountered some rough waters as well. This also reminds me of another vessel from 2013.
It was the MOL Comfort, and for those of you who don't remember, don't recall, the MOL Comfort had snapped in half due to rough waters, rough weather, with one half sinking. And by the time they got a tugboat out there to get the other half that was still afloat, it ended up sinking. So it was a total loss, so it's, you know, we're all familiar with what can happen. You know, bad things happen to good cargo, right? There was a vessel that went into the Key Bridge. We definitely see things happen. One of the questions I do get in this role is, how many containers a year fall into the ocean or have to get thrown, you know, thrown overboard, right? And I was like, that's a really good question because, you know, what does that number look like?
So I looked it up and I got an average of about 1,382 containers on average. So it's 1,382 containers a year. Okay? And do they get recovered? The answer is no. So there's containers that are hanging on the ocean floor. And some who, you know, some containers that don't just sink to the bottom right away have to be shot so that they can sink to the bottom. But yeah, unfortunately, they sink to the floor and they are never retrieved. So think about that. That's a lot of containers every year, right? So you know, we talk about ocean carriers not, you know, not liable, right? When are they not liable? Some of these make sense. There's 17 reasons, right? Some of these make sense. Act of God, act of war. What we see, you know, why they won't be liable is insufficiency of packaging.
So some containers will, you know, or the parts that you're shipping, you know, carriers will say, well, it wasn't packaged for ocean voyage, right? Or wasn't packaged correctly to, you know, make the flight, right? These are 17 reasons, so if one through 16 don't apply, the carriers will then invoke number 17, which is a very long run-on sentence. And basically, it's saying that, you know, the burden of proof is on the person claiming, so whoever's filing that claim, you have to prove why they were not liable. Okay? Because again, they do not take the value of the goods into account. It is, you know, they charge based on the space and the weight. Okay? Another example of, you know, a bad day, right? This cargo was sitting on the tarmac. The engine revved up and sucked it right in. Cargo at rest, right?
Cargo at risk. This one, I did ask my son about last night as well. I said, what do you think went wrong here, right? Let me get an 11-year-old's perspective. Because I said, do you think he went too fast? Do you think they didn't, you know, package it correctly for the road? You know, what happened? My son's answer was, well, basically, it was packaging hands down because they didn't latch it correctly for the packaging. But he also said that if they need to package it in case the truck has to go super fast. I thought, okay. But yeah, it was a little bit of both, right? The turn was taken too fast and it wasn't latched down 100%. So the packaging definitely came into play there. Okay. Oh, and this one.
I really like to share this picture just to really ask the folks, you know, if we were in a room together, what were they thinking? It's not, you know, I mean, safety and security advisors would probably come running and you've got your insurance people running it. You've got just probably everybody hands on. Not the safest, right? It's important to understand within our world of supply chain, right? How is the risk being managed? Do we have the right Incoterms in place? Are we using them correctly? Are we, you know, do we have coverage? What if something goes wrong, right? We have insurance for our cars, our facilities, right? Are we covered for our cargo? Just all things to make sure that we're communicating and having those conversations between the sellers and the buyers, you know?
So it's very, very important to understand how you're handling your risk. Because right here, this picture, they are not handling their risk in the best way. They are being risky as ever. And I'll just leave you with, you know, cargo at rest is cargo at risk. And, you know, we are here to help support in any way we can. Questions, you know, we are here. Q&A.
All right. Thank you, Jamie. We'll go into the Q&A portion. And I'll just start reading some of the questions that have been submitted. And just a friendly reminder that if we do run out of time and we don't get to your question, we will follow up with you after to make sure that it gets answered. Okay. So, Jamie, one of the first questions we got, I think it was regarding the ONE Apus image that you were showing at the beginning of the presentation. And I think you were referencing throwing containers overboard to lighten the load. We had a question come in that said, what do you mean by throwing overboard? Is that what you were referring to, or?
Yeah. Yes. The jettison, if there's damaged containers or if it's not seaworthy, they may have to remove some of those containers off the vessel in order to continue on with the voyage.
Thank you. The next question. So when loading containers, this particular individual had an issue in China. Is that loading, when loading is placing items in a container, but not blocking and bracing? We've never run into this before with vendors loading and blocking and bracing. Has this changed with the Incoterms 2020?
Let me look at the question. Sorry. Loading container. I can take this one offline and reach out just to get some more clarification on that one.
Okay. Under FCA terms, is the shipper responsible for loading the vehicle as well as export clearance?
So for FCA, that would be so the export clearance would be on the seller as well as arranging to that named place. So that trucking to that named place.
With CIP, can you explain who files the claim with the carrier?
Sure. So the buyer would be requesting the seller to purchase insurance on their behalf. So the buyer would then be working with the insurance company to file that claim with whom the seller chose as their insurance carrier.
What is more popular or common? Is it DAP or DPU? And can you explain why?
Yeah. DAP is something that we see that is most common: delivered at place. Because with DPU, that seller is responsible for the unloading. But where it can get kind of tricky is with DAP, you know, it's at that place and then it transfers. With DPU, you go to the named place and the seller is still responsible for the unloading, but not the customs clearance. So you as the buyer have to handle the clearance and then make sure you're communicating with the seller. So I would say DAP is definitely more common.
Can you explain the difference between FOB and ocean air and if they're generally interchangeable?
So again, FOB, kind of what we talked about as far as being an ocean-only term. Or if you want to use the same type Incoterm, we suggest FCA because that can be used for both air and ocean. FOB, really, if you're moving containerized freight, we'd really want to look at FCA, and if there's additional questions, we can certainly talk to that offline.
Jamie, one of the attendees called out that it's interesting that trucking and warehousing liability is per pound and not per kilo as air freight. Can you explain why?
Yeah. So in the U.S., I mean, in the domestic world, we typically are working in pounds versus kilos because it's not international.
Can you clarify the difference between what is considered the real weight and what is considered the dimensional weight?
So the dimensional weight, and I can confirm on this, but, you know, once you have all the packaging together, it's going to have what takes up that most space. For the regular weight, that would be, you know, your goods only. And then dimensional weight will be once it's packaged for movement.
Can you circle back to that FOB breakdown that you spoke about a few minutes ago and explain exactly when carriers, ocean carriers, are liable under FOB terms?
So liable, so as far as the 17 reasons why they wouldn't be liable. Okay. There's 17 reasons why the carriers would not be liable. But for, you know, typically when we see they're liable, if they, you know, drop freight, right? Drop the containers. I mean, that was negligent and that caused damage. So that's where we would see them being liable.
I know you answered one which of the Incoterms were more popular between DAP and DPU, I think. But are there other select Incoterms that are commonly used worldwide? Or does it depend on where you're shipping, what you're shipping, etc.?
Yeah. I think it definitely depends, you know, on the contracts that you have between the buyer and the seller, what makes sense for your business. But, you know, we see EXW used a lot. We see FOB, FCA, DAP. You know, DDP, I don't see too much. But again, it depends. It really just depends on your business model. When should you use FAS versus FOB port? So again, this would be between the buyer and the seller where that risk would transfer, either, you know, at the port or once it's done with its main carriage, right? So that would be based upon the contract that you have within your company.
Going back to that ONE Apus image again, do you know how it's determined which cargo is discarded overboard? Do they just look at the containers towards the top? Can you explain or have more details about that?
Sure. Yeah. So it's, you know, it really depends on the situation, but however they can lighten their load, right? They're going to take the top containers, what makes sense. If there's damaged containers that, you know, are not seaworthy, they would decide that. But it's basically, you know, up to the captain of the ship, right, to decide how to make the vessel seaworthy and continue with its voyage. So I can follow up as well and provide some additional insights as, you know, as to where and how exactly they decide.
Okay. With EXW, is the seller still responsible for creating the export documentation?
Yes. Yes.
Oh, I did get a clarification on one of the FOB terms that I had asked a question about. I think I mistakenly said ocean versus air, but it's supposed to be on account. Does that make more sense with that question?
No. I'll take that one offline and we'll reach out directly.
Okay. Do you have an example of the difference between FCA and EXW? Example of when to use that? So the difference.
Oh, the difference. So the EXW, yeah. So the buyer is going to be responsible from, you know, the seller's facility. So the cost, the risk, the obligation. FCA, you know, the arrow, as you if you can envision it, kind of moves a little bit to, okay, is it that first touchpoint after it leaves the seller's facility? So the responsibility of loading and the responsibility of the export clearance will fall on the seller when using FCA. So when using EXW, that buyer is responsible for that piece.
Is CIF the only term that comes with insurance? And what if a customer wants to have their load insured with door-to-door delivery?
So I'm sorry, you said CIF?
Is CIF the only term that comes with insurance?
Yeah. So we have no, we have CIF, and then we have the CIP. And based on omni-modal versus ocean only. And then the last, what was the last question?
What do you do if a customer wants to have their load insured with door-to-door delivery?
When using CIF? So that would need to be worked out with the seller when you're asking them to purchase that insurance on your behalf. You'd want to have that conversation surrounding the lane insured or so the door-to-door. You want insurance to cover the whole transit of the freight.
If goods are imported to a U.S. warehouse and all import fees are paid, what could the terms be if the goods are resold to a U.S. customer from their dock and the freight is paid by the customer?
Sorry. Can you repeat that?
Jamie, we have a lot of good questions here.
Yeah.
So if the goods are imported to a U.S. warehouse and all import fees are paid, what would the Incoterms be if the goods are resold to a U.S. customer?
So I guess my question here would be, first of all, I think it would be, you know, when the seller is sending the goods to the U.S., everything paid, that's going to be your DDP terms. And when that is completed, you know, from, say, China to U.S., and then there's another sale once that leg has finished, I guess I would want to understand more. So I can follow up on that.
Do you recommend going away from FCA terms to DDP terms?
I would recommend FCA over DDP. The reason behind that being the visibility and having more of control over your goods that you're purchasing. So yeah, I would definitely steer more towards FCA.
We had another attendee ask if you could repeat your comment from the beginning with the first letter of the Incoterm and the responsible party.
For EXW?
So letter of the Incoterm and responsible party. I'm not sure if they mean EXW.
Okay. I might need some more clarification on that one.
Okay. I am just looking through. We do have a lot of questions that I think would need more clarification with the attendee who submitted the question. So for those, I feel it's probably best if we take those offline, Jamie, and follow up individually. Let me see. I know we have time for one more question, so.
These are all great questions. With Incoterms comes lots of questions all the time. I definitely understand and will be reaching out to just, again, gain additional clarification.
Okay. For the last question, can you use FCA seller's warehouse so that the seller can be responsible for the loading and export clearance, but the buyer can take care of the transportation?
Yes. FCA, the seller would be responsible for that export clearance and the loading, you know, loading of the freight. Then the risk, cost, and obligation are going to transfer at that named place on the seller's side. Yes, the buyer would essentially be responsible for the main carriage.
Okay. Just after reviewing the last few questions we have, like I said before, Jamie, I think it's best to take those offline with those individuals. But thank you very much for the presentation today. It had a lot of useful information, and I'm sure we'll have some follow-up. Jamie, could you go to the next slide? I just wanted to share our upcoming events. So we do have a couple of regions on this call. So I did give you guys QR code links to our events for the North Central, the Midwest, and the South Central. And you can save those landing page links to stay up to date on all of our regional webinars. Thank you, everyone. We'll see you on our next one.
Thank you.