Differences between 2000 and 2010 Incoterms

Transcription

1 Want to start or grow your import/export business? Learn how from industry experts. View our training schedule Differences between 2000 and 2010 Incoterms

2 Incoterms are revised periodically. he current version is called Incoterms All contracts made under Incoterms 2000 (the previous version) remain valid. Although we recommend using Incoterms 2010, parties can agree to choose any version of the Incoterms rules. It is important, however, to clearly specify which version you have chosen (Incoterms 2010, Incoterms 2000 or any earlier version). Below are the main differences in incoterms 2000 and Incoterms 2010: Categories of Incoterms 2000 INCOERM 2000 INCOERM 2010 E: Departure his is the only instance where the seller makes the goods available to the buyer at the seller's own premises. F: Main carriage unpaid hese terms indicate that the seller is responsible to deliver the goods to a carrier named by the buyer. C: Main carriage paid he seller is responsible for contracting and paying for carriage, but not for additional costs or for risk of loss or damage once the goods have been shipped. C terms are appropriate for departure or shipment- as opposed to arrival- contracts. D: Arrival D terms indicate that the seller is responsible for all the costs and risks associated with transporting the goods to the destination. D terms are appropriate for arrival contracts. EX W FA FC A FO B C CF R CI CIF DE Q F DE U Ex-Works Free Alongside hip Free Carrier Free On Board Carriage aid o Cost and Freight Carriage Insurance aid o Cost Insurance Freight Delivery Ex Quay Delivered at Land Frontier Delivered Ex hip Unpaid aid EX W FA FC A FO B C CF R CI CIF Ex-Works Free Alongside hip Free Carrier Free On Board Carriage aid o Cost and Freight Carriage Insurance aid o Cost Insurance Freight Delivered at erminal Delivered at lace aid

3 ummary of the main differences: he Incoterms 2010 eliminates the concept of delivery over the ship s rail or past the ship s rail for the FOB, CFR and CIF terms. he seller s responsibility extends until the goods are on board the vessel rather than past the ship rail (his is a very small technical difference). he concept of goods being loaded over the ship s rail dates back to a time when most cargoes were loaded in break bulk and actually hoisted by cranes over the ship s rail. revious versions of the Incoterms have specified that the seller s risk of loss, for example, passed to the buyer at the specific point when the goods passed over the ship s rail on their way to being loaded. oday, most cargo is loaded in containers and, although those containers are also loaded over the ship s rail, it has been decided to use the term On Board for the 2010 Incoterms. he transfer of risk provision remains the same, aside from the clarification that risk passes when the goods are on board the vessel, not when they pass over the ship's rail. For FOB incoterm the seller must package the goods rather than provide the packaging (even though in practise this was usually already the case, it is nice to get this clarified). Under CIF, the seller is required to pay for more insurance than previously. he Incoterms 2010 more prominently feature insurance and security-related obligations of the seller and buyer in the various terms. he DEQ incoterm is replaced by he new Incoterms 2010 rule means Delivered At erminal. his rule applies for any mode of transport and specifies that the seller is responsible for arranging [email protected] RADE (87233)

4 carriage and for delivering the goods, unloaded from the arriving vehicle. Under this rule a terminal is any place where the goods may be unloaded; for example, a wharf, a container yard, or an air cargo terminal. he parties to the contract of sale should be careful to specify as precisely as possible the specific terminal and point within the terminal where the goods are to be unloaded (many terminals are very large). his is because the risk of loss will stay with the seller until such a delivery and it is important there will be no confusion about the point at which the risk of loss passes to the buyer. he F, DE, and U incoterms are replaced by. he other new Incoterm,, means Delivered At lace. he seller is responsible for arranging carriage and for delivering the goods (which is ready for unloading from the arriving carriage) at the named place. his is an important difference from, where the seller is responsible for the actual unloading as well. hus the seller should only have the goods ready for unloading at the right place for the buyer. If the seller wishes to use the term, it should make sure that its transportation contract matches its obligations. Otherwise, the seller could be charged for unloading costs by the carrier and not be able to recover them from the buyer. Also under the term, the seller is responsible for clearing goods for export but the buyer is responsible for clearing goods for import. If the buyer wishes to have the seller take responsibility for import clearance as well, it should use the ( aid) term. If you need to receive hard copies (as opposed to electronic versions) of your shipping documents, make this point clear in your contract. Incoterms 2010 recognizes electronic means of communication as being equivalent to paper communication when the parties agree. herefore, if the [email protected] RADE (87233)

5 parties to a contract of sale wish to specify that electronic communications are the equivalent of paper communications, they should insert a term dealing with this in the contract. Need further assistance or advice? Contact Us Ask us or join our raining Courses [email protected] hone: RADE (87233) Int l Calls: +27 (0) Fax: Office: Unit 4, First Floor, rident ark II, Niblick Way, omerset West All rights reserved. his document may be distributed in full in its current format. HOWEVER, No part of this publication may be altered, or extracted AND reproduced, distributed, or transmitted in any form or by any means without the prior written permission of rade Logistics, except in the case of brief quotations giving reference to rade Logistics. DICLAIMER: he information in this document serves as a guide only and DOE NO constitute advice of any sort. rade Logistics will not be held liable for the use or misuse of this information. You must contact a professional advisor for any legal or accounting advice on the contents of this document. No liability or responsibility whatsoever is accepted. By using this information you agree to these terms and conditions. [email protected] RADE (87233)