What is DES (Delivered Ex Ship)?

Definition of DES

DES, or "Delivered Ex Ship," is an Incoterm used in international trade to specify that the seller delivers the goods to the buyer on board the ship at the destination port. The term was part of the Incoterms 2000 but has since been replaced by DAP (Delivered at Place) and DAT (Delivered at Terminal) in the Incoterms 2010. Despite its replacement, DES is still sometimes used, and understanding its implications remains important.

Key Responsibilities Under DES

Under DES, the seller's responsibilities are extensive and include:

1. Export Packaging: The seller must pack the goods appropriately for export.
2. Export Licenses and Customs Formalities: The seller is responsible for obtaining the necessary export licenses and completing export customs formalities.
3. Carriage to Port of Shipment: The seller arranges and pays for the transportation of the goods to the port of shipment.
4. Loading Charges: The seller covers the costs of loading the goods onto the ship.
5. Main Carriage: The seller arranges and pays for the sea freight to the destination port.
6. Delivery on Board the Ship: The seller delivers the goods on board the ship at the destination port. The risk transfers to the buyer once the goods are on board the ship at the destination port.

The buyer's responsibilities under DES are:

1. Unloading: The buyer is responsible for the costs and risks associated with unloading the goods from the ship at the destination port.
2. Import Duties and Taxes: The buyer handles the import duties, taxes, and any other costs associated with the importation of the goods.
3. Transport from Port: The buyer arranges and pays for the transportation of the goods from the destination port to their final destination.
4. Insurance: The buyer arranges for insurance from the point the goods are delivered on board the ship at the destination port.

When to Use DES

DES is particularly useful in situations where:

1. Seller Control Over Main Carriage:

The seller wants to control and be responsible for the main carriage up to the destination port, ensuring proper handling and minimizing risks during sea transport.

2. Buyer Familiarity with Destination Port:

The buyer is familiar with the destination port's unloading procedures and can efficiently manage the importation process, including customs clearance and local transportation.

Advantages and Disadvantages of DES

Advantages:

1. Seller Control: The seller maintains control over the shipment until it reaches the ship at the destination port, ensuring proper handling during the main carriage.

2. Clear Risk Transfer Point: The risk transfers to the buyer once the goods are delivered on board the ship at the destination port, providing a clear and precise point of risk transfer.

Disadvantages:

1. Unloading Costs and Risks for Buyer: The buyer is responsible for the costs and risks associated with unloading the goods from the ship, which can be substantial and complex depending on the port's infrastructure and regulations.

2. Complex Coordination: Both parties must coordinate closely to ensure smooth handling and transfer of goods at the destination port, which can be challenging, especially in unfamiliar or busy ports.

Conclusion

DES (Delivered Ex Ship) is an Incoterm that places significant responsibility on the seller to deliver goods on board the ship at the destination port, covering all associated costs and formalities up to that point. While it provides advantages in terms of seller control and clear risk transfer, it also imposes unloading costs and risks on the buyer. Understanding DES and its implications is essential for international trade professionals to effectively manage their logistics and ensure smooth transactions.