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DAT is an incoterm published by the ICC, having its first edition in 1936 and the most recent one in January 2020. The recent edition has a new name for DAT, i.e., ‘Delivered at Place Unloaded’, but the responsibilities of the seller and the buyer remain unchanged.

In Delivered At Terminal, the terminal is the nominated place of destination, which has a crucial implication in the shipping process. In DAT, the seller is responsible for the delivery of goods till the named port and the buyer liable for all charges thereafter.

Initially, the nominated port/spot at the location is acknowledged by both parties. At this port, the seller takes charge of unloading goods and the buyer looks after the import proceedings. Once the seller unloads the goods at the named port, the risk moves to the buyer.

DAT in shipping terms

DAT INCOTERMS Explained

  • In DAT, the place of destination is agreed upon by both parties.
  • The seller is responsible for delivery till the named place on port. (It can also be the terminal, transport hub, forwarding agent’s warehouse, etc.)
  • The main carriage responsibility (from the first port to the second port) rests with the seller.
  • The responsibility of unloading of goods at the destination port rests with the seller.
  • Once the goods are unloaded the risk and costs are to be borne by the buyer.

Seller’s Responsibilities

Cost

Payment terms for the seller include:

  • Warehouse charges: for maintaining goods till they are delivered
  • Packaging charges: for marking and labeling goods as per export standards
  • Inland transportation: for loading and transporting goods till the first port
  • Deport charges: for port duties
  • Freight forwarding charges: the freight forwarding agent’s fee for handling logistics
  • Custom charges: for export customs proceedings
  • Documentation charges: for preparing and submitting necessary documents required for the shipping process

Delivery terms

The seller has responsibilities till the nominated place of port, so he stays liable for the main freight proceedings. His duty stays till the delivery of goods at the first port, dealing with the documentation and shipping procedures. Further, the responsibility of unloading goods at the appointed port also rests with the seller.

Risk transfer

The risk of goods stays with the seller till the appointed place of port. He stays liable for any risk related to damage of goods till they are unloaded at the nominated port.

Insurance

Since the entire freight responsibility rests with the seller, he is liable for insurance coverage till the nominated place of port. He’ll bear all the insurance charges during the course; in the case of sea/ocean freight, he’ll have to take marine insurance for goods.

Duty and customs clearance

The seller has duties towards export customs proceedings. He stays responsible for preparing all necessary documents. Payment for port charges and customs clearing procedure, duties, and local charges are borne by him.

 

Buyer’s Responsibilities

Cost

Costs borne by the buyer include:

  • Custom charges: for import customs proceedings
  • Port charges: for port clearing procedures
  • Inland transit charges: for transportation from the port to the warehouse
  • Warehouse charges: for maintaining goods after the delivery of goods by the seller

Delivery terms

Under DAT terms, the buyer must accept the proof of documents provided by the seller at the destination port. He shall receive the goods delivered at the port.

Risk transfer

The risk of goods transfers to the buyer after the delivery. Also, if the buyer fails to instruct the seller in reference to the nominated port, the risk and damage will be borne by him.

Insurance

As the carriage duty rests with the seller, insurance is his responsibility. The buyer has no obligation to insurance.

Duty and customs clearance

As the duties transfer at the nominated harbor, the buyer is responsible for import customs and duties. He remains liable for all payment charges and risks thereafter. Acquiring all necessary documents provided by the seller at the appointed port and carrying out further import proceedings are a part of his responsibilities.

Difference Between DAP, DAT & DDP

DAT DAP DDP

FAQs on DAT Incoterms

Does DAT include duty?

Yes, DAT does include customs duty, but both the parties have to contribute towards it. The seller has to take care of export duty and the buyer has to take care of import.

Does DAT include unloading?

The seller has to take care of unloading of goods at the destiation port as per DAT.

 


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Previously, while loading the smaller shipments, the goods were sorted at the time of onboarding. This process often led to the jumbling of all the goods/products together. However, with the introduction of containerized shipping, goods can be classified and organized before they are onboarded. The containerized system has transformed how the International Shipping operates by optimizing the process of how shipments are onboarded. CFS or “Container Freight Stations” helps in consolidating smaller shipments or Less Container Load (LCL) shipments, hence playing a vital role in the containerized shipping process.

CFS Meaning in Shipping

A Container Freight Station (CFS) is a warehouse station responsible for the consolidation or deconsolidation of cargo before the products/goods are imported or exported. The station is involved in an export-import transaction, both at the point of origin as well as the destination. In simpler terms, it is a space where goods are stored before loading and after unloading the cargo.

For LCL, wherein the shipments belong to several customers, the cargo is loaded in one container and is brought to a CFS to be consolidated before the goods are sent to their final destination.

The CFS is operated by a shipping line or a terminal and its warehouse is located close to the port or shipping terminal. These stations are also responsible for customs clearance procedures and documentationfor its shipments. It is a customs notified area where all dealings are processed through customs authentications. A Customs House Agent (CHA) serves as the main link between container freight stations and the parties involved in the transaction.

Why Container Freight Station?

CFS facilitates intermodal transport and optimizes the process of sending smaller shipments to their respective locations with appropriate safety measures and tracking facilities. Here are a few reasons why CFS service is an essential part of export-import logistics.

  • At the CFS, goods are consolidated into the containers and each vessel is provided with a unique identification number, helping the trader track the container and the product.
  • The goods sent via CHS being containerized reduce the risk of damage, facilitating a smooth transaction between the exporter and importer.
  • A proper list is maintained – including the name of the importer/exporter, CHA agent name/house, product, onboarding/unloading port, product name, truck number, shipping line, quantity, size, etc.
  • Customs clearance procedure is not required at the gateway ports.
  • Since CHS serves as a concentration point that consolidates smaller shipments, it helps in reducing empty container movement, thus making LCL shipments cost-effective.
  • Automation for loading and unloading containers at the dock port.

 

How does a Container Freight Station Work?

Container freight stations play a role both at the time of embankment as well as disembarkment of goods from the point of origin (export) to the destination (import). The procedure followed by CFS during import and export is explained below.

Role of CFS while Importing goods

CFS acts as an extended part of a port. While importing goods, it can be sent directly to the CFS instead of sending them straight from the port itself, thus reducing port congestion significantly.

For example, Company ABC from India has a shipment coming from US-based Company XYZ. The exporter will prepare the necessary documents and accordingly notify the CHA house. Once the goods are at the port, they will be transferred to the CFS and the subsequent processes are followed –

Step 1:- The goods received at Indian port are first verified by customs and stacked at the station.

Step 2:- Before taking the consignment to CFS, the steamer agents/liners/importers have to file the Import General Manifest at the port.

Step 3:- The CFS then de-stuffs the goods from the containers.

Step 4:- The CHA/Importer has to file a Bill of Entry with customs after which the goods are assessed, and payment of duty made.

Step 5:- Post customs clearance, the department gives “out of charge” order, and the goods are released from the CFS with a “gate pass” to the trader.

Role of CFS while Exporting Goods

As explained above, a CFS is responsible for the consolidation of cargo and stuffing it in containers before the goods are shipped. This process reduces congestion at the port of origin and ensures that the cargo is shipped efficiently.

For example, Company ABC from India has a shipment going to Company XYZ in the US, the procedure involving CFS for export of goods will be as follows:-

Step 1:- The exporter will load the goods in a truck and deliver it at the nominated CFS along with the shipping bill

Step 2:- The goods will then undergo the process of loading and carting

Step 3:- The goods will be scanned and verified in the warehouse and then stuffed into containers

Step 4:- The container is then sealed by the customs officer and sent out of the CFS to the port

Step 5:- Once the goods are at the port, they are sent out through the shipping line (the shipping line is the company decided by the party for processing the shipment)

What are the main functions for a Container Freight Station?

The main freight station achievements are listed below:

  • Receiving and dispatching cargo
  • Consolidation and deconsolidation of the cargo (for LCL shipments)
  • Stuffing of containers for export and de-stuffing or stripping of containers for import
  • Temporary storage for cargo and laden or empty containers, and also for onward transit or re-export
  • Transit from rail/road to and from ports
  • Examination and assessment of export-import shipments by customs authorities for customs clearance
  • Tracking system to locate containers or cargo

Difference between CFS, ICD, Container Yard & Bonded Warehouse

An ICD or an Inland Container Depot is also a transit facility like CFS. However, ICDs are mostly located in the interior part of the country while a CFS is a customs space situated close to sea/ocean ports. An ICD can operate as an individual entity while the CFS is a part of the customs house jurisdiction.

A bonded warehouse holds goods that have already undergone customs clearance procedures. On the other side, the goods brought at CFS have to undergo customs verification and clearance.

A Container Yard (CY) in shipping is a dedicated space at the port where the FCL containers are brought and stored before they get loaded onto the ship. While CFS has the same functionality, the station processes LCL shipments and not FCL.

 


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Multiple documents are required to be prepared and furnished to complete an export trade. One of the most crucial among these documents is the Shipping Bill.

What is a Shipping Bill?

To obtain clearance for exports from customs, you have to submit a Shipping Bill in the form of an application. Whether you are shipping your export items by air, sea, or road, an exporter cannot load the goods without filing the Shipping Bill.

A Shipping Bill must be submitted electronically unless the Commissioner or Principal Commissioner makes an exception and allows you to submit it physically. Shipping Bills are color-coded depending on the export type.

Types of Shipping Bills

  • Dutiable Shipping Bill: It is printed on yellow paper and is meant for goods that are to be exported on payment of export duty.
  • Duty-Free Shipping Bill: It is printed on white paper and is for goods exported without duty payment. These are not eligible for duty drawback.
  • Drawback Shipping Bill: It is printed on green paper, but once the drawback has been paid it is printed on white paper.
  • Shipping Bill for export of goods under Duty Entitlement Passbook Scheme (DEPB): It is printed in blue; this is for goods exported under the government’s DEPB export incentive scheme.

In a notification dated 25th March 2019, the Shipping Bill and Bill of Export (Forms) Amendment Regulations, 2019, was introduced. This defined the forms for various types of Shipping Bills.

How is Shipping Bill generated

The Central Board of Indirect Taxes and Customs has a national platform named Indian Customs Electronic Gateway (ICEGATE) that provides e-filing services, including electronic filing of Shipping Bills. To facilitate faster Customs clearance, ICEGATE is linked with multiple organizations like the Reserve Bank of India (RBI), Directorate General of Foreign Trade (DGFT), government ministries, and government partner agencies.

The Indian Customs EDI System (ICES) acts as the online and real-time interface for custom clearance through ICEGATE and via Electronic Data Interchange (EDI). ICES has also enabled internal automation of the Custom House.

 

Process for Generating a Shipping Bill

  • Before filing an Export Shipping Bill, exporters or Customs House Agents (CHA) have to register with the EDI system using IEC code, AD code, and/or CHA license number.
  • Under the EDI system, the Shipping Bill has to be submitted in the prescribed format at the Customs service centers. It is accompanied by copies of the invoice and packing list.
  • Upon submission, a checklist is generated, which has to be verified by the exporter or the CHA.
  • The verified data is then submitted to the EDI system by the service center operator. The system generates a Shipping Bill Number, which is endorsed on the printed copy of the checklist and given back to the exporter or the CHA.
  • Generally, the Shipping Bill is processed by the system itself without any human aid or intervention. This is done based on declarations made by the exporter. However, the assessment of Shipping Bills for FOB value of over Rs 10 lakh, free sample of over Rs 20,000, or drawback amount of over Rs 1 lakh is done by the Assistant Commissioner of Exports.
  • If any export cess needs to be paid, the requisite challan is made available to the exporter and the amount can be paid at a designated bank. No copy of the Shipping Bill is made available to the exporter at this stage.
  • One can check the status of the Shipping Bill at the service center. Besides, any query raised can be seen and replied to in the service center.

How to correct or ammend a Shipping Bill

Corrections or amendments in the declaration can be made at the service center, provided the documents have not yet been submitted in the system and the Shipping Bill has not yet been generated.

However, if any changes are deemed necessary after the Shipping Bill number is generated or the arrival of the goods at the Export Dock but before the granting of ‘Let Export’ of the goods, it can be done by the Assistant Commissioner of Exports.

If the ‘Let Export’ has also been issued, any changes can be made only by the Additional/Joint Commissioner, Custom House, in charge of the export section.

Format and Content of the Shipping Bill

Now let us look at the complete format of Form SB I (Regulation 2). The various fields required to be filled in are related to the following:

  • Exporter, buyer, and customs broker details
  • Carrier, port, and transportation details
  • Invoice-related information
  • Cargo-related itemized information
  • Export duty and GST-related information
  • Export scheme/job work/re-export details

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September 17, 2015 Trucking

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