Legal Definitions - delivered ex ship

Delivered Ex Ship (DES) is a term used in international trade contracts, specifically for goods transported by sea or inland waterways. It clearly defines the responsibilities of both the seller and the buyer regarding the delivery, costs, and risk of loss for the goods being shipped.

Under a DES agreement, the seller is responsible for preparing the goods for export and covering all transportation costs to bring the vessel carrying the goods to the agreed-upon destination port in the importing country. The seller also bears the risk of any loss or damage to the goods until the ship has successfully arrived at that destination port. Once the ship arrives, the seller's delivery obligation is complete, and the risk of loss or damage transfers from the seller to the buyer. At this point, the buyer becomes responsible for unloading the goods from the ship and paying any import duties, taxes, or other charges associated with bringing the goods into their country.

• Example 1: Heavy Machinery Shipment

  A German manufacturer sells specialized industrial machinery to a client in Brazil under a DES contract. The German seller arranges for the machinery to be packed, cleared for export, and loaded onto a cargo ship bound for the port of Santos, Brazil. The seller pays for all shipping costs across the Atlantic. If the ship encounters a severe storm and the machinery is damaged while at sea, the German seller is responsible for the loss and must either replace the machinery or refund the Brazilian buyer. Once the ship safely docks at Santos, the risk transfers to the Brazilian buyer, who then becomes responsible for arranging and paying for the machinery to be unloaded from the ship and for all Brazilian import duties and taxes.

• Example 2: Bulk Commodity Sale

  An Australian mining company agrees to sell a large quantity of iron ore to a steel mill in China using a DES contract. The Australian seller is responsible for loading the iron ore onto a bulk carrier and paying for the vessel's journey to a designated port in China. If the ship carrying the ore runs aground or sinks before reaching the Chinese port, the Australian seller bears the financial loss of the ore. However, once the ship arrives safely at the Chinese port, the Chinese steel mill (the buyer) takes on the responsibility and cost of offloading the iron ore from the ship and handling all necessary customs clearance and import tariffs.

• Example 3: Containerized Consumer Goods

  A Vietnamese furniture manufacturer sells a container full of furniture to a retail chain in the United Kingdom under a DES agreement. The Vietnamese seller arranges for the furniture to be packed into a container, cleared for export, and shipped to the port of Southampton, UK, covering all freight costs. If the container is lost overboard during the voyage, the Vietnamese seller is liable for the loss. Upon the container ship's arrival at Southampton, the risk of loss or damage to the furniture transfers to the UK retail chain. The retailer then becomes responsible for paying for the container to be unloaded from the ship, transported to their warehouse, and for all UK import duties and VAT.