Incoterms:

Incoterms refer to International Commercial Terms. Presently, there are 11 (eleven) incoterms exists in the latest publication of incoterms 2020. Incoterms published by the International Chamber of Commerce (ICC). In 1936, incoterms first published by ICC. Since, inception in 1936, Incoterms revised in several times; first revision came in 1957, subsequently incoterms revised in 1967, 1976, 1980, 1990, 2000, 2010, and finally, the latest, in 2020. After every ten years incoterms takes into revision by ICC. INCOTERMS 2020 became effective from January 1, 2020. The new incoterms, that is incoterms 2020, will not invalidate contracts using the prior/previous version. Hence, buyers and sellers make a contract for the sale of goods through any version of the incoterms e.g. incoterms 2010, incoterms 2020, etc.

These commercial terms define and clarify buyers and sellers' risks, obligations, and responsibilities such as - in international trade who pay for the transport of the goods, who will take insurance of the goods, who pay for customs duties, customs handling and other cots, where goods will be delivered, and at which point risk delivers from seller to buyer, etc.; all these matters solved by Incoterms.

How to incorporate INCOTERMS 2020 rules:
1. Put the chosen Incoterms (e.g. FOB, CFR, CPT, etc. )
2. Put the named port, place or point (e.g. Southport, Shanghai, Chattogram, Osaka, etc.)
3. Put the Incoterms Version (e.g. Incoterms 2020, Incoterms 2010, etc.)
Example can be: FOB Southport Incoterms 2020

Classification of the 11 (eleven) Incoterms 2020 rules:
Among the 11 (eleven) incoterms 2020, seven (7) incoterms can be used for any mode(s) of transport, and 4 (four) can be used for sea and inland waterway transport.

The Seven (7) Incoterms used for any mode(s) of transport are:
1. EXW - EX WORKS
2. FCA - FREE CARRIER
3. CPT - CARRIAGE PAID TO
4. CIP - CARRIAGE AND INSURANCE PAID TO
5. DAP - DELIVERED AT PLACE
6. DPU - DELIVERED AT PLACE UNLOADED
7. DDP - DELIVERED DUTY PAID

The Four (4) Incoterms used for sea and inland waterway transport are:
8. FAS - FREE ALONGSIDE SHIP
9. FOB - FREE ON BOARD
10. CFR - COST AND FREIGHT
11. CIF - COST INSURANCE AND FREIGHT

Published Date: 27/08/2023