Delivered

Delivered

A term used mainly in LNG shipping contracts for an arrangement under which the seller is responsible for arranging and paying for the shipping of the gas, and title passes at the port of delivery. Generally, the seller’s risks are greater in a delivered transaction because the buyer only pays for the landed quality/quantity, and the Boil Off Gas is the seller’s responsibility. The seller is responsible for clearance through customs and payment of all duties unless the contract provides otherwise. An alternative name for a Delivered contract is Ex Ship. Very similar to Delivered is Cost, Insurance and Freight (CIF). This is an arrangement under which the Seller arranges and pays for shipping and insurance, as for a Delivered contract, but risk and title are transferred from the seller to the buyer in a manner defined in the agreement (e.g. on shipment or on delivery of the bill of lading to the buyer). CIF and Delivered are frequently, but erroneously, treated as if they were identical because the costs to the seller are the same. Under a CIF contract, however, the seller can avoid being in possession of the cargo within the jurisdiction of the buyer country’s government. This may be important for fiscal or legal reasons. The third arrangement frequently met in the shipping of LNG is Free on Board, (FOB), which is used to denote deliveries where the buyer arranges for the shipping and there is a delivery and change of title at the time the cargo is loaded into the ship at the loading port.

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