Incoterms 2020 is here!

Sadly, I was too late to save this poor trader from Incoterms 2020 Misinformation!

As an event which happens now once every 10 years the launch of a revision of the Incoterms Rules is always an important moment in the International Trade Calendar.  Given that the Incoterms Rules govern over 12 Trillion dollars of trade around the world every year, a revision of these rules are an event to consider carefully in terms of their impact on your global trade processes and procedures.

However, be careful where you get your advice from as there has been a proliferation of inaccurate advice on blog posts across the web due to the unauthorised release of discussion documents during the early revision of the Incoterms Rules.

Here are some of the fallacies promulgated about the web as a result of what was irresponsible grandstanding behaviour on the part of those concerned.  

Incoterm CNI - FALSE

The article suggested that a new Incoterms Rule would be created to fill requirements between FCA and CFR/CIF.  This incoterm DOES NOT EXIST.  

Unfold FCA in two Incoterms - FALSE

The article suggested that FCA would be split into variants for Maritime and overland transport.  THIS IS NOT GOING TO HAPPEN.

FOB and CIF for Container shipments - FALSE

Incoterms 2010 do not recommend using FOB and CIF for container shipments because when shipping in containers the seller normally loses control of the goods upon loading into the container and not when they are loaded on board the sea vessel.  This leaves a gap where liability would fall upon the seller until such point that the goods are loaded on board.  No change has been made in this respect in the Incoterms 2020 rules as it remains the case that container shipments are more appropriate for multimodal transport terms FCA or CIP.

Two Incoterms based on DDP - FALSE

It was suggested that DDP would be split into two new Incoterms rules namely DTP (Delivered Terminal Paid) and DPP (Delivered at Place Paid).  NEITHER OF THESE RULES HAVE BEEN CREATED IN INCOTERMS 2020.

New Incoterm RTL - Ready to Leave - FALSE

Some publications on the Internet have included in charts an Incoterm RTL which was never even considered during the drafting process.  Again THIS RULE IS NOT AN INCOTERMS 2020 RULE.

New Incoterm DVU - Delivered VAT Unpaid - FALSE

Some publications on the Internet have included in charts an Incoterm DVU delivered VAT unpaid.  Again THIS RULE IS NOT AN INCOTERMS 2020 RULE.

Delivered At Orbit and Delivered at Galaxy - FALSE

Possibly as a joke, this was suggested because of the aspirations of Elon Musk and others to make humans an interplanetary species but are probably a couple of hundred years too early to implement and were of course, dropped from discussions.

The fact that so many of these falsehoods and inaccuracies are STILL available to be seen on the web is why I felt it imperative to call out these inaccuracies as real damage can be done to real business contracts by the application of invalid rules.  Could you imagine if you relied on CNI Incoterms 2020 term and went to court and lost the case because such a term never existed and you didn't fact check? 

Its fundamentally important to get your info from the right sources in order to avoid this type of inaccurate information.  The authoritative location for advice on Incoterms is from the publishers themselves at http://www.iccwbo.org and http://www.iccbooks.com.

SO... IF ALL THE ABOVE IS FALSE, WHAT IS TRUE?

For the record, a brief review of the main changes in Incoterms 2020 can be found from the following reliable sources: 

https://iccwbo.org/resources-for-business/incoterms-rules/incoterms-2020/

Other Resources

Trade FInance Global Interviews members of the ICC UK who participated in the drafting of the new Incoterms 2020 rules.

Where can you get more information?

Once you have had an overview from the official sources, we recommend you buy the Incoterms 2020 publication from your local chamber of commerce.  Once done, if you have any need for a simple explanation of the new rules and how they apply in practice, why not buy Bob Ronai's Kindle Book 'A Commentary on the Incoterms 2020 Rules' available for UK readers, Australian readers, Spanish readers,  Indian readers, French readers, and German readers.  If you know of other Amazon sites feel free to add them in the comments.

If you found this article of use and would like to try out our online training covering Incoterms 2010-2020 (its not official ICC training but has great feedback from participants on the course) you can sign up for our convenient CPD course here.