 A Canadian exporter of farm equipment in Regina, Saskatchewan, Canada has agreed to

sell a large piece of machinery to a buyer in Idaho, USA referencing DDP Boise, Idaho, USA
Incoterms® 2020 in their contract of sale. The Canadian seller hired a specialist trucking
company to deliver the oversized tractor on a flatbed trailer.

a. The shipment gets held up at the US border for 2 days because some import
documents are missing. As a result, the transport firm bills the seller for extra
days for additional travel time. According to the Incoterms® rules, can the seller
pass these costs to the buyer since they are associated with import
documentation? Explain. (3 points)

b. The truck finally passed through customs and arrived at the buyer’s site. The
truck driver asked the buyer to maneuver the tractor down the ramps on the
trailer, but the buyer declined and suggested it would be better for the specialist
driver to drive the machine down the ramps to get it off the flatbed. The truck
driver agreed but the tractor was not aligned properly, and as it was being
offloaded, it tipped over causing extensive damage to the large machine. Are the
losses associated with the damage to the machine the seller’s or the buyer’s
responsibility? Explain. (3 points)

Answer:
 The costs of importing the products into the United States are the seller's responsibility
under the Incoterms® laws. This includes any customs paperwork expenses. The additional
days incurred by the shipping company if the cargo is delayed at the border due to a lack of
documentation are the seller's responsibility. According to the Incoterms® laws, the buyer
undertakes all expenditures and risks associated with the items at the time of delivery. This
section discusses the hazards associated with removing the cargo from the transport
vehicle. Buyer is liable for damages if the items are damaged during unloading.

a. The vendor is unable to pass these costs on to the buyer. DDP terms provide that
the seller is responsible for all expenditures up to and including delivery, including
import formalities.

b. The customer is financially liable for any losses caused by the machine's damage.
DDP terms provide that the customer assumes all risks associated with the items
beginning with delivery.

Reference

Incoterms 2020 | What are Incoterms?. PFCollins. January 28, 2020.

https://pfcollins.com/incoterms/#:~:text=Incoterms%202020%20allows%20the%20buyer,of
%20carriage%20with%20the%20carrier.