You are the Senior Purchaser for a large Multinational Corporation that purchases a great deal of their products from overseas. These products are very large, very heavy, and expensive and are custom manufactured to your specifications. Lead times are critical and usually run from 8 to 12 months per order. For that reason you want to retain as much control over the shipments as possible. You need to determine which Incoterm is the best for your shipments. You have narrowed down your choices to three Incoterms:

1) EXW

2) FOB

3) DAT (or DPU in the 2020 version)

Answer the following general questions regarding Incoterms:

1. Explain what Incoterms are and what their purpose is.

2. Does the Incoterm EXW obligate the seller to load the goods at the point of shipment?

3. Is the Incoterm DDP a better choice for these shipments? Why?

Answer the following questions for each of the three Incoterm listed above:

1. Who is responsible (buyer or seller) for the loading of your product at the sellers location?

2. Who is responsible for the export clearance of your product at the sellers location?

3. Who is responsible for vessel/plane loading of your product at the sellers location?

4. Who is responsible for the main transport of your product at the sellers location?

5. Who is responsible for inland transportation of your product at the destination?

6. Based on your answers for the above 5 questions, which Incoterm is the best choice for our example? Explain why your choice is the best.