Incoterms 2010.pngSeveral blog readers have suggested it should highlight the arrival of Incoterms 2010, which took effect from 1 January this year.
As always, since first publication in 1936, they have been produced by the International Chamber of Commerce (ICC). They are important, because they define the terms of delivery for chemicals, and all other traded products.
This is the first revision for 10 years, and so far seems to have attracted little public comment. Of course, the ICC is a ‘neutral’ body, and so its terms do not advantage either buyers or sellers. Equally, their use is not mandatory, and people can still continue to use Incoterms 2000 if they prefer.
But there is certainly a concern in some companies that this lack of discussion may lead to them being specified them in new contracts, without everyone fully understanding their implications. As one expert told the blog, “the trick is to make sure you read them, and really understand them“.
Another senior purchasing manager with a global major emphasised that “there are a host of small, subtle, but significant changes“. For example, DDU (Delivered Duty Unpaid) has been abolished. Equally, CIF (Carriage, Insurance and Freight) can only be used for maritime shipments.
The concern is that the use of Incoterms 2010 may lead to confusion, if one side to a transaction doesn’t realise changes have been made. In turn, this could cause delays to a shipment, and to increased costs.
Incoterms are not a glamorous subject. But the blog would certainly recommend anyone involved with product movements to make sure they really understand where their liability starts under Incoterms 2010 and, more importantly, where it ends.