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Incoterms 2020 has been released! As we mentioned before, the new international commerce terms take effect on January 1, 2020.

Incoterms are fundamental to foreign trade as they provide a set of contract terms for international freight. With this new edition, the ICC – International Chamber of Commerce aims to increase confidence and transparency in business and global trade.

The main purpose of Incoterms is, as it has always been since their first version of 1936, to simplify communication processes, as well as to present international negotiating terms. This new Incoterms aim to be more reachable and easier to use than their previous versions. This includes more detailed explanations, aided and reinforced with graphs illustrating the responsibilities of importers and exporters, for each Incoterms rule. The introduction of Incoterms 2020 includes detailed explanations to help direct you to the most appropriate Incoterm for a given transaction, or how your sales contract will interact with complementary contracts.

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Some of Incoterms 2020 main characteristics are:

• To provide for demonstrated market need in relation to bills of lading (BL) with an on-board notation and the Free Carrier (FCA) Incoterms rule;
• To align different levels of insurance coverage in Cost Insurance and Freight (CIF) and Carriage and Insurance Paid to (CIP);
• To include arrangements for carriage with own means of transport in FCA, Delivered at Place (DAP), Delivered at Place Unloaded (DPU), and Delivered Duty Paid (DDP);
• There is a change in the three-letter name for Delivered at Terminal (DAT) to DPU;
• Incoterms 2020 includes security-related requirements within carriage obligations and costs…

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In line with their commitment to develop technology available to everyone, access to the essential information on new Incoterms is available on a Mobile Application launched by ICC, which includes a wide range of informational elements, including breaking news, events and training.

Learn more about Incoterms 2020.

You may acquire new Incoterms 2020, under ICC conditions, HERE.

The International Chamber of Commerce (ICC) is working to publish new Incoterms later this September to take effect early next year. According to the ICC, this publication will include an update to the regulations that define the liability of buyers and sellers operating in global trade.

 

About Incoterms

Incoterms is the acronym for “International Commerce Terms”. Incoterms were designed by the ICC in 1936 to avoid miscommunication that abounded in international trade. At the time they were born under the name “International Rules for the Interpretation of Trade Terms”.

The introduction of standardized rules and interpretations has greatly improved international business transactions. From then on these rules were adjusted and evolving in line with international trade.

 

Expected Changes in Incoterms 2020

The current Incoterms (which you can find here) are from 2010. With the changes felt in the world trade, the adjustment to the new reality becomes urgent. In order to make these adjustments in line with actual needs, the International Chamber of Commerce has joined a development group consisting of 5 elements representing the main world trade zones – the European Union, the United States of America, Australia and China.

This working group has as its action plan the simplification of the rules as well as the adaptation to the current reality. With this, they intended to provide a clearer text without superfluous or confusing information. This group should also be aware that English will not be the native language for many Incoterms users.

There are, however, aspects such as VAT, Customs Unions or VGM where no changes are expected. This is because this update seeks to standardize global rules, leaving aside local issues of intrinsically distinct characteristics.

Changes expected from Incoterms include:

• Elimination of EXW (Ex Works), DDP (Delivered Duty Paid) and FAS (Free Alongside Ship);
• Extending the scope of the Free Carrier Arrangement (FCA);
• Updates on FOB (Free on Board) and CIF (Cost, Insurance & Freight);
• The arrival of CNI (Cost and Insurance).

Cyber security will also be a factor and take into consideration in the new Incoterms. In recent years, with the increasing use of these systems, there has also been a growing increase in computer attacks involving the deletion, theft or corruption of data, as well as the theft of financial information. Therefore, the creation of an Incoterm to protect against these new dangers is expected. In addition, clarification work is expected from international trade companies so that they become more aware of the potential dangers that may arise, and help them to take precautions.

 

Conclusion

International trade has seen significant changes in the last decade, the present reality is different from that of 2010. In this sense, the ICC, based on the accumulated knowledge of this decade, has joined a team that brings together elements from the most important world markets to update the new Terms for the World Trade – Incoterms 2020. With this it is expected:

• Clarification and attribution of risks and responsibilities;
• Packaging, marking and inspection of products;
• Safety Certificate;
• Stakeholder Responsibility

 

New Incoterms 2020 will be launched later this month, to become effective on January 1, 2020.

To learn more about the rules of the new Incoterms 2020, see the page of the International Chamber of Commerce.

 

Green Ibérica will be alert to this issue and as soon as news emerges we will share them with our customers.

Misdeclared hazardous cargo can pose a serious risk not only to that cargo, as also to health, safety, property. This is because, since it is not properly manifested, it is not properly handled and packaged.

Due to the specific – and risky – characteristics that this load represents, it is subject to acceptance by the line. When accepted, the necessary specific adjustments will be made in booking.

Hazardous cargo that is not scheduled or documented as such shall be considered as undeclared hazardous cargo. Therefore all costs, damages, fines and penalties that may arise will be the merchant’s responsibility.

Therefore, and for the safety of all stakeholders, EVERGREEN has announced that it will apply fines for those who declare hazardous cargo incorrectly. Thus, any omission, concealment or misrepresentation of dangerous cargo will result in penalties to those entitled.

This decision is in line with the measures taken by other shipowners and results from accidents which have been attributed to Misdeclared hazardous cargo. According to the Cargo Incident Notification System (CINS), these are the causes of approximately 25% of all major accidents on board container ships

With this measure EVERGREEN intends to reduce the risk that incorrect declaration of dangerous cargo poses to ships, cargo and people.

Misdeclared Non-Hazardous Cargo

Also the remaining undeclared cargo will lead to additional charges. Therefore, any incorrect description or statement will lead to merchant liability, which may incur penalties.

Green Ibérica is here to assist in the correct declaration of all cargo. For more information, please contact us.

Dear shippers,

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