A Simple Guide To Understanding Incoterms

Incoterms 1
Name of Student
Institutional Affiliation
Professor
State and city
Date

Incoterms 2
The logistics sector is widely known for its ability to transport and deliver a variety of products
across distant regions. Food has become one of the most common commodities distributed by
shipping companies. It is due to it being among the products that have been transported for an
extended period now. Transportation of perishable goods has become to most of the shippers a
standard delivery activity, (Pathak, 2016). Perishable goods such as fish are delivered to various
food stores and establishment across the globe regularly. Although the shipping is done
periodically, it has enormous challenges facing the shipping process. This paper will address the
relevant incoterms that affect the transportation of perishable fish from Cape Town to London.
Carriage Paid to (CPT)
While transporting perishable fish, it is essential to ensure that the seller covers the costs of
transporting the fish up to the named point of delivery. The consignment is considered delivered
once it is handed over to the primary carrier identified. It enables risk transfer to the buyer of the
fish. The seller will be responsible for product origin cost which includes freight costs and export
clearance billing. In case a seller is required to ensure the cargo, the incoterm provisions of CPT
are considered, (Erdogan and Kavas, 2020). The requirements guide on the party needed to bill
for the insurance.
Carriage and Insurance Paid to (CIP)
The terms in this policy are closely similar to the provisions of CPT with the only difference of
the seller required to obtain insurance of the cargo while shipping. This policy calls for the seller
to cover 110% of the cargo price under Institute Cargo Clause of the Institute of London
Underwriters unless the transacting parties have an exclusive agreement in place regarding
insuring the cargo, (Erdogan, and Kavas, 2020). The value currency in the policy should be