Incoterms 2010 Course

DID YOU KNOW THE UCC IS DROPPING OUR FAMILIAR FOB ORIGIN AND FOB DESTINATION AND GOING TO INCOTERMS?  PLEASE READ ON!!

COURSE OUTLINE

The new INCOTERMS® 2010 became effective January 1, 2011. Incoterms--which is an abbreviation for International Commercial terms--are a series of sales terms. They are published by the International Chamber of Commerce (ICC) and are widely used in commercial transactions. In addition to providing a set of rules for the interpretation of commonly used trade terms, INCOTERMS® 2010 accomplish the following: (a) significantly revises Group D listed in INCOTERMS® 2000; (b) reduce Incoterms from four groups to two groups, allowing trade experts to choose the most suitable rule related to the mode of transport; and (c) reduce the absolute number of Incoterms from 13 to 11. Moreover, INCOTERMS® 2010 offer additional guidance which assists users in selecting the most appropriate Incoterm for each transaction. The revised terms also spell out rules regarding the use of electronic procedures; detail information on security-related clearances for shipments; and offer advice with respect to domestic trade.

What are Incoterms?

Incoterms or International Commercial terms are a series of sales terms. They are published by the International Chamber of Commerce (ICC) and are widely used in international commercial transactions. The purpose of Incoterms is to provide a set of international rules for the interpretation of commonly used trade terms in international transactions. They closely correspond to the U.N. Convention on Contracts for the International Sale of Goods. The first Incoterms were issued in 1936. The most recent Incoterms were updated in 2010 and became effective January 1, 2011.

Who needs to understand Incoterms?

Government trade officials as well as many private sector parties should understand Incoterms. Such private sector parties include: exporters, importers, trade finance professionals, export compliance specialists, customs brokers, freight forwarders, insurers, international credit professionals, and sales and purchasing managers.

What are Incoterms used for?

Incoterms assist trade practitioners in interpreting the most commonly used international trade terms. Using correct Incoterms in an international transaction reduces considerably uncertainties arising from the different interpretation of such terms in different countries. They apportion international trade transaction costs and responsibilities between buyers (importers) and sellers (exporters) and reflect modern-day transportation practices. Incoterms assist in significantly reducing misunderstandings among traders and thereby minimizing trade disputes and litigation. However, their scope is limited to matters related to the international rights and obligations of the parties involved in the contract of sale with respect to the delivery of the goods sold. Thus, they apply to the contract of carriage, not the contract of sale.

Why were the INCOTERMS® 2000 revised?

INCOTERMS® 2010 are the updated version of INCOTERMS® 2000. INCOTERMS® 2010 have been developed as a result of an extensive review of current shipping practices and trends in an effort to keep up with the rapid expansion of world trade. The key drivers for this update include: a need for improved cargo security, changes to the Uniform Commercial Code in 2004 that resulted in a deletion of U.S. shipment and delivery terms, and new trends in global transportation.

How do INCOTERMS® 2010 differ from INCOTERMS® 2000?

In addition to providing a set of rules for the interpretation of commonly used trade terms, INCOTERMS® 2010 significantly revise Group D listed in INCOTERMS® 2000.

The five INCOTERMS® 2000 listed in Group D included the following:

DAF Delivered At Frontier

DES Delivered Ex Ship

DEQ Delivered Ex Quay

DDU      Delivered Duty Unpaid

DDP       Delivered Duty Paid

INCOTERMS® 2010 contain the following categories:

DAT        Delivered At Terminal

DAP        Delivered At Place

DDP        Delivered Duty Paid

Moreover, INCOTERMS® 2010 reduce the number of Incoterm groupings from four to two, allowing trade experts to choose the most suitable rule related to the mode of transport.

The 13 INCOTERMS® 2000 contained four essential categories of Incoterms. They were:

Group E – Departure

Group F – Main carriage unpaid

Group C – Main carriage paid

Group D – Arrival.

The two main categories of INCOTERMS® 2010 are now organized by modes of transport. Used in international as well as in domestic contracts for the first time, the new groups aim to simplify the drafting of contracts and help avoid misunderstandings by clearly stipulating certain obligations of buyers and sellers.

Group 1. Incoterms that apply to any mode of transport are:

EXW       Ex Works

FCA         Free Carrier

CPT         Carriage Paid To

CIP          Carriage And Insurance Paid To

DAT        Delivered At Terminal

DAP        Delivered At Place

DDP        Delivered Duty Paid

Group 2. Incoterms that apply to sea and inland waterway transport only:

FAS          Free Alongside Ship

FOB         Free On Board

CFR         Cost And Freight

CIF          Cost, Insurance, and Freight

Further, the two new groupings listed above note a reduction of the number of Incoterms from 13 to 11.

Finally, INCOTERMS® 2010 provide additional helpful guidance and clarify obligations. For instance, the revised terms also spell out rules regarding the use of electronic procedures; detail information on security-related clearances for shipments; and offer advice with respect to domestic trade.

Can I still use the INCOTERMS® 2000?

According to the International Chamber of Commerce, all contracts made under INCOTERMS® 2000 remain valid even after 2011. In addition, although the ICC recommends using INCOTERMS® 2010 after 2011, parties to a contract for the sale with respect of the delivery of goods can agree to use any version of Incoterms after 2011. It is important, however, to clearly specify the chosen version INCOTERMS® 2010, INCOTERMS® 2000, or any earlier version.

Where can I obtain a copy of the new INCOTERMS® 2010?

You can purchase a copy of the new INCOTERMS® 2010 from the ICC website.

Where can I learn more about the new Incoterms?

IPSCMI has an Incoterms 2010 course you can take online. 

Who Should Attend This Seminar?

 

Purchasing and supply chain management professionals who need to be retrained from UCC to INCOTERMS 

Marketing and sales professionals who need to be retrained from UCC to INCOTERMS  Senior executives with the following corporate positions:

1.         Chief Purchasing Officers

2.         Chief Procurement Officers

3.         Chief Supply Chain Officers

Directors, Senior Managers, Managers, and Heads of the following departments:

1.     Purchasing

2.    Procurement

3. Supply Chain Management

4. Supply Chain Strategic Planning

5.  Strategic Planning

6. Business Development

7.  Supplier/Vendor Management

8.   Supplier/Supply Management

9. Buying/Purchasing

10.  Materials Management

11. Logistics

12. Manufacturing/Operations 

13. Outsourcing

14.  Information Technology 

15. Administration

 

 

 

 

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