{"id":3711,"date":"2019-07-01T00:00:00","date_gmt":"2019-07-01T00:00:00","guid":{"rendered":"https:\/\/www.bilogistik.com\/new-incoterms-enter-in-force-in-2020\/"},"modified":"2021-11-18T13:11:24","modified_gmt":"2021-11-18T13:11:24","slug":"new-incoterms-enter-in-force-in-2020","status":"publish","type":"post","link":"https:\/\/www.bilogistik.com\/en\/blog\/new-incoterms-enter-in-force-in-2020\/","title":{"rendered":"New Incoterms enter in force in 2020"},"content":{"rendered":"

The nature of international trade changes, and with it, the need to update a fundamental mechanism to facilitate negotiations and contracts: Incoterms.<\/strong> 1 January 2020, these new standards will enter in force. The International Chamber of Commerce<\/a><\/u> is currently giving them the final technical touches. While we still do not have the new text, we do know that the aim is make their application simpler and more practical.<\/p>\n

What are Incoterms?<\/h2>\n

Incoterms<\/a><\/u> came about in 1936 in order to improve negotiations between exporters and importers<\/strong>. They seek to provide perfect understanding between the different parties involved in an international trade action, overcoming hurdles such as language or different laws in different countries.<\/p>\n

It should be noted that it is not mandatory to comply with them<\/strong> but are rather standards that parties voluntarily accept<\/strong> regarding freight delivery conditions, liabilities and the costs entailed by the transaction.<\/p>\n

Why do Incoterms change?<\/h2>\n

As one might imagine, international trade has changed a great deal since 1936. Incoterms are renewed to continue meeting needs and trends<\/strong> at all times.<\/p>\n

In fact, since they appeared, Incoterms have been updated every decade<\/strong>. Their current version is from 2010<\/a><\/u>, and although the 2020 version will soon be revealed, the latest version does not necessarily replace previous versions. They can still be used, but the version’s date must be specified.<\/p>\n

Changes brought by Incoterms 2020<\/h2>\n

While still awaiting publication, many of the key elements of new Incoterms have already been leaked through the drafting group’s statements. Below are some probable changes:<\/p>\n

Elimination of Incoterm FAS<\/strong><\/p>\n

FAS<\/strong> or Free Alongside Ship, is an infrequently-used Incoterm that is not much different from FCA (Free Carrier Alongside). In practise, FAS is only sporadically used in international commodities trade, so the possibility of creating a specific Incoterm for this kind of freight is also being studied. It would entirely replace its use.<\/p>\n

Creation of a new Incoterm: CNI<\/strong><\/p>\n

We are surmising that a new Incoterm will be born, called CNI (Cost and Insurance)<\/strong>. This would cover a regulatory loophole between FCA and CFR\/CIF, since it would include the cost of international insurance at the exporter’s expense but would not include freightage. This would be a group-C Incoterm, meaning that liability for the freight would fall on the purchaser at the outgoing port.<\/p>\n

Division of the Incoterm FCA <\/strong><\/p>\n

FCA is the most versatile Incoterm<\/strong> (it encompasses around 40% of international trade transactions). Perhaps for this reason, the possibility of dividing it into<\/strong> two more specific terms is being evaluated, one oriented toward land delivery<\/strong> and the other toward maritime delivery<\/strong>.<\/p>\n

Division of the Incoterm DDP<\/strong><\/p>\n

DDP or Delivered Duty Paid<\/strong>, may disappear as such, because its characteristics bear contradictions with the current customs code<\/strong>.<\/p>\n

In exchange, its basis would live on in two new Incoterms:<\/p>\n

    \n
  • DTP (Delivered at Terminal Paid)<\/strong>: when the freight is delivered at a terminal (port, airport, etc.) inside the purchaser’s country, and it is the vendor who must pay customs fees.<\/li>\n
  • DPP (Delivered at Place Paid):<\/strong> when the freight is delivered anywhere that is not a terminal, and the seller bears the customs fees. This Incoterm will have greater relevance with the boom in e-commerce.<\/li>\n<\/ul>\n

    Elimination of Incoterm EXW<\/strong><\/p>\n

    EXW or Ex Works will be eliminated due to improper use and conflicts with the law<\/strong> in certain countries bearing on occupational hazards. Moreover, it can easily be replaced by other, more suitable terms, such as FCA (or one of its new divisions).<\/p>\n

    Incoterms 2020: seeking ease and unequivocal use<\/h2>\n

    All these changes seek to facilitate putting Incoterms into practise<\/strong>. It is hoped that terminology and wording will also be simplified to correct their use, since many of them are being used incorrectly<\/strong>. In the same fashion, they will be designed with the new realities of the logistical sector in mind, such as e-commerce, transport safety, increased inter-modality, and more.<\/p>\n","protected":false},"excerpt":{"rendered":"

    The nature of international trade changes, and with it, the need to update a fundamental mechanism to facilitate negotiations and contracts: Incoterms. 1 January 2020, […]<\/p>\n","protected":false},"author":1,"featured_media":4161,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[60,62,63],"tags":[],"class_list":["post-3711","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legislation","category-multi-modal-transport","category-news"],"aioseo_notices":[],"yoast_head":"\nNew Incoterms enter in force in 2020 | Bilogistik<\/title>\n<meta name=\"description\" content=\"Incoterms establish the totality of the shipping conditions within international trade. 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