On 1 January 2020, the eighth revision of the Incoterms (International Commercial Terms) will be launched. These acronyms are composed of three letters and describe the conditions of delivery of goods and products in global trade.
Although Incoterms are not obligatory, and thus companies and individuals are free to agree their own conditions, their use is widespread as they facilitate agreeing the conditions under a common framework.
To date, the International Chamber of Commerce, located in Paris, has been responsible for creating and updating them, normally every ten years. All companies in the logistics sector, including Stock Logistic, must always take into account these changes that govern the day-to-day transactions.
Professionals such as exporters, importers, customs agents, transporters, freight forwarders, insurances, international banks, sales and purchasing managers, consultants etc.
What do they regulate?
The objective of Incoterms is to delimit these aspects with precision:
- The distribution of logistics costs between seller and buyer.
- The concretion of the risks associated with the transport of goods.
- It specifies the documents and customs formalities necessary for foreign trade operations.
- The DAT (Delivered At Terminal) is replaced by the new incoterm DPU (Delivered At Place Unloaded) in which it is possible to continue arranging door-to-door transport. Also with the commitment that the seller does not take charge of the tax formalities at destination, but that the recipient takes charge of them.
- Regarding the CIP (Carrier and Insurance Paid To – Transport and Insurance Paid To), new maximum insurance conditions have now been established, with the coverage of greater risks and the fixing of higher compensations.
- In the case of the FCA (Free Carrier-Free Carrier) the new rules include the possibility that the seller can have a copy of the transport document, which is considered essential to prove that delivery has been made.
The new Incoterms will continue to be 11 in total with their distribution between intermodal Incoterms and maritime Incoterms. They will continue to be led by classics such as the EXW, the CIF or the FOB.