The Incoterms 2010 (INternational COmmercial TERMS) came into effect on 1 January 2011.
Since the beginning of 2017, the Incoterms rules have been revised by a group of experts. They are in charge of questioning the different traders.
The aim is to adapt the current rules to new technical and commercial developments in order to improve their use.
Update: Incoterms 2020 are now available, feel free to consult our new article on the subject.
Incoterms 2010
Incoterms are used in international commercial contracts. They refer to the obligations of the seller and the buyer in the transaction. The fields covered are the loading of the goods, the types of transport, the delivery, the risks (as well as the expenses), the insurance, the formalities (transport document). They thus make it possible to know exactly who bears the risks and the expenses related to the transport of the merchandise.
Since the last version dating from 2010, there are 11 incoterms instead of 13. The main innovations of Incoterms 2010 were the emergence of DAT and DAP, ending the use of DEQ, DAF, DES and DDU. Multimodal incoterms are also recommended for the transport of containerized goods. The 2010 Incoterms officially take into account the dematerialized documents. The evolutions of the transport techniques (containerization, groupage, multimodal transport, etc.) are also incorporated. The Incoterms 2010 are categorized in two parts:
Rules applicable to any mode of transport
- 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)
Rules for maritime and river transport
- FAS (Free alongside ship)
- FOB (Free on board)
- CFR (Cost and freight)
- CIF (Cost, insurance and freight)
If you wish to consult the summary table of Incoterms 2010 summary table of Incoterms 2010, you can read our special file on the subject.
When will the next 2020 Incorterms be used?
The International Chamber of Commerce (ICC)International Chamber of Commerce (ICC) has been publishing Incoterms since 1936. In recent years the ICC has made changes in 1990, 2000 and 2010.
In a conference held at SITL 2019, Christoph-Martin Radtke of ICC France said that “the next update will take place in 2020“.
Many rumors are already circulating on the next edition. They mainly concern Incoterms EXW, DDP, FAS and FCA (around 40% of international commercial transactions). But none of this information can be verified without the approval of the International Chamber of Commerce.
Officially, Incoterms are expected to be unveiled in the first quarter of 2019 with entry into force on January 1, 2020. According to the ICC
“The Incoterms 2010 rules are currently being revised to respond to market developments over the last 10 years, such as increased security requirements. Over the past two years, the global ICC network has been consulted several times to comment on the content of the new rules.”
“With the emergence of new technologies, government policies and environmental regulations, Incoterms 2020 will provide a common framework for the future of trade.”
One of the objectives of this revision is to make the rules more comprehensive in order to facilitate its use. The ICC wants to reduce misunderstandings in order to avoid misinterpretations.
The drafting group of new Incoterms formed by the ICC in 2016, is composed of nine experts from around the world: 3 from Asia, 2 from America and 4 from Europe. In terms of expertise, the drafting group has four users and five international trade lawyers.
Since 2016, the Incoterms writing group has met several times to analyze and discuss over 3000 comments provided by CCI National Committees. Consultations took place with the participation of the ICC National Committees in April 2017, October 2017 and May 2018. This process also included two global “user” consultations, which took place in Beijing (2017) and London (2018).
During the various consultations, the international drafting committee met 12 times between July 2016 and September 2018 to review the proposed changes and recommendations of the National Committees of the ICC.
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