Every 10 years, the International Chamber of Commerce publish a new set of Incoterms®. Incoterms® are three letter commercial terms that are used in domestic and international sales contracts and they outline where risk and costs transfer from the seller to the buyer.
The new set of Incoterms® will be introduced at the start of 2020, but we will be able to see what the changes are before the end of 2019.
Incoterms® rules define the responsibilities of the buyer and seller with respect to the packing, transportation and insurance of goods as they are transferred from the seller to the buyer. Incoterms® rules can be invaluable to determine costs and liability associated with exporting, importing and shipping and for avoiding disputes down the road but only if companies understand how to use them properly. When used correctly, Incoterms® can help avoid uncertainty and delays.
Incoterms 2020 are broken down in to two groups. The first seven terms are ‘multimodal’ meaning they can be applied to any mode of transport including road, sea, rail and air, the second set of four terms apply to sea and inland waterway transport only.
According to ICC, the new Incoterms are more accessible for businesses to use, with more detail and explanatory notes than previous editions. The new terms do not featured any radical changes, such as the removal of EXW or the addition of a brand new term, but is important to note that incoterms 2020 has placed much more importance on where goods are delivered as ‘delivery’ has been moved up to a higher position within the 10 articles that define each term.
It is important to understand incoterms and be precise with the usage of them.
Our next Incoterms® course will be on 13th March and will cover Incoterms® as they are and what changes are expected with the new set in 2020. Please click here to find out more, or book you
For guidance on Incoterms® 2010, please see here.
To order your copy of Incoterms® 2020 please visit the International Chamber of Commerce website here.