International business: the new Incoterms 2020
Incoterms – the acronym for International Commercial Terms – is a concept grouping 11 international regulations created, managed and regulated by the International Chamber of Commerce (ICC). While the earliest date back to 1936 and have since undergone alterations and updates, the most recent are the Incoterms 2020, set to come into force on 1 January 2020.
Why are Incoterms important and what do they affect?
Incoterms’ main aim is to facilitate international trade. They are therefore accepted and recognised in all countries and are used to determine delivery conditions in international sales contracts, the costs of the international sales transactions, the responsibilities between the buyer and seller during each stage of transport, the documents to be managed by each party and the costs related to international insurance, etc.
Speaking in further depth on the importance of the Incoterms regulations and the changes for 2020 were Carles Murillo, Academic Director of the Master in International Business, and Maria Giné, Operations Director at Arola Comercio Internacional, one of Spain’s largest logistics operators. Arola is present in over 80 countries, providing full coverage for transport, logistics and customs operations.
International trade in Spain has grown at a steady rate in recent years. Spanish exports of goods increased by 1.6% from January to September 2019 over the same period of the previous year, amounting to 215,600 million euros, an unprecedented figure for the amount registered for the period, according to trade data declared by the customs offices of the Ministry of State Revenues and Taxes.
Imports also increased by 2.0%, rising to 241,046 million euros.
The Secretary-General of the Spanish International Chamber of Commerce, Jordi Sellarés-Serra, stresses that the Incoterms do not substitute a sales contract but are rather an important part of one, simplifying and unifying sales conditions in the vast majority of countries around the world, with the very aim of facilitating as much international trade as possible
There are two key changes to Incoterms 2020 when compared to their 2010 format:
DAT – ‘Delivered at Terminal’ (+agreed place of delivery) has come to be known as ‘Delivered at Place Unloaded (DPU)’.
FCA – Free Carrier (+agreed place of delivery) now allows Bills of Lading to be issued after the goods have been loaded.
- Incoterms EXW
- Incoterms FCA
- Incoterms CPT
- Incoterms CIP
- Incoterms DPU
- Incoterms DAP
- Incoterms DDP
- Incoterms FAS
- Incoterms FOB
- Incoterms CFR
- Incoterms CIF