Incoterms 2010
Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant
As of 01 January 2011, international commerce involving the purchase and sale of goods requires upgrading to Incoterms 2010. The impact of some of these changes may not turn out as intended but the changes are what they are and we international trade pros must deal with them. For more details, visit the International Chamber of Commerce Incoterms web site.
Incoterms deal with many of the practical issues of delivery and risk and specify the goods, price, payment method, risk of ownership, services, and locale of legal jurisdiction. Fore warned is fore armed.
Some of the most noteable changes are:
- The Incoterms 2000 DAF (Delivered at Frontier), DES (Delivered Ex-Ship), DEQ (Delivered Ex-Quay) and DDU (Delivered Duty Unpaid) have been eliminated
- Incoterms 2010 DAT (Delivered At Terminal) and DAP (Delivered At Place), have been introduced
- Effectively, DAP replaces DDU. DAP means delivered, neither unloaded at the named place of destination nor cleared for import
- DAT means that the goods are delivered and unloaded at the nominated terminal but not cleared for import
- DAT generally applies to deliveries to bulk or container terminals
Among the more subtle changes:
- Sellers and buyers are now obliged to cooperate documentation
- The allocation for terminal handling charges at the point of arrival have been clarified
- The quaint term EDI has been replaced with references to “electronic records or procedures” which must be used whenever agreed or customary
- Risk and ownership responsibility for cargo security has been addressed
Still other changes are intended to make Incoterms easier to use. For instance, the illustrations & pictures are included.
The caveat about explicit invocation of Incoterms is the same as applies in the Convention for the International Sale of Goods (CISG). Incoterms 2010 must be expressly incorporated into the contract or they will not be observed.