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Friday, 27 September 19
LOWDOWN ON INCOTERMS 2020 OVERHAUL - BALTIC EXCHANGE
 KNOWLEDGE TO ELEVATE
This ninth revision of Incoterms is changed in style and substance. The revisions improve certain aspects of Incoterms 2010 and address issues which were not prevalent in 2010. The introduction to Incoterms 2020 includes a detailed explanation of how to choose the most appropriate Incoterms rule for a sale contract.
Incoterms are a collection of internationally recognised standardised trade terms published by the ICC and widely used in domestic and international sales. Incoterms cover various practical elements of a sale contract such as the primary obligations of the seller and the buyer; the responsibilities of each; time of delivery and the transfer of risk. They also deal with insurance, export and import clearance and the division of other costs pertaining to the delivery of goods.
The ICC’s revision of Incoterms aims to respond to changes in the market so that they continue to be relevant and useful to global trade. With this particular revision, the ICC aims to take account of:
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The growth of the global economy and greater access to markets worldwide
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Increasing attention to security in the transportation of goods
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The need for flexibility when considering insurance coverage, depending on type of goods and transport
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Calls from banks for an on-board bill of lading in some financed sales under the Free Carrier (FCA) rule
For existing contracts, Incoterms 2010 will continue to apply even if performance of the contract will take place in 2020 unless the contract says otherwise. For contracts entered into between September 2019 and January 2020, it is prudent for the parties to state which set of Incoterms is to apply, especially if performance will take place after 1 January 2020.
After 1 January 2020, courts and arbitrators can be expected to assume that any reference to Incoterms in new contracts is intended to be a reference to Incoterms 2020, unless there is evidence to the contrary.
The relevance of Incoterms 2020 depends on the contract terms used. For example, GAFTA, FOSFA and sugar (SAL and RSA) contracts do not incorporate Incoterms. Any parties trading only on those contract terms without amending them to incorporate Incoterms will obviously be unaffected by the changes in Incoterms 2020. Standard petroleum product contracts refer to Incoterms, as do many ethanol, coal and metals contracts. Parties dealing with such contracts will need to:
• Check their standard contract forms
• Consider the changes introduced by Incoterms 2020 and whether they wish their contracts to incorporate Incoterms 2020 or an earlier version of Incoterms (or none)
• Make any necessary consequential changes in the standard forms for new contracts (for example, changing ‘DAT’ (Delivered at Terminal) to ‘DPU’ (Delivered at Place Unloaded))
• Inform counterparties and trading/execution departments of the changes to Incoterms and any revisions to contract documentation
Main changes
1. Bills of lading with an on-board notation in FCA deliveries
2. Different levels of insurance cover between Cost Insurance and Freight (CIF) and Carriage and Insurance Paid To (CIP)
3. Acknowledging the use by parties of their own transportation in FCA, Delivered At Place (DAP), DPU and Delivered Duty Paid (DDP) deliveries
4. The inclusion of security-related requirements within carriage obligations and costs
5. Detailed Explanatory Notes for Users
6. The arrangement of provisions relating to costs
7. Change of ‘DAT’ to ‘DPU’
The detail
The table below sets out the substantive changes in more detail:
1. Bills of lading with an on-board notation in FCA deliveries
Amendments to Incoterms 2020
In FCA deliveries, parties (or their financing banks) often require a bill of lading with on-board notation but, given that delivery on FCA terms is completed before goods are loaded onto the vessel, the seller may not always be able to obtain an on-board bill of lading from the carrier.
Under the new Incoterms, the buyer and the seller may agree that the buyer will instruct its carrier to issue an on-board bill of lading to the seller after the goods have been loaded. The seller will then be obliged to tender the bill of lading to the buyer.
The ICC emphasises that, where the above option is exercised, the seller does not take on an obligation to the buyer in respect of the terms of the contract of carriage.
2. Different levels of insurance cover in CIF and CIP
Amendments to Incoterms 2020
Incoterms 2020 provide for different minimum insurance cover for CIF and CIP deliveries.
Previously, both CIF and CIP required minimum insurance cover at the level of Clause (C) of the Institute Cargo Clauses.
In the new revision, for CIF deliveries, the default position remains the same (that is, Clause (C) of the Institute Cargo Clauses). Parties may agree higher levels of cover if they wish.
However, for CIP deliveries, the seller is now obliged to obtain insurance cover at the level of Clause (A) of the Institute Cargo Clauses (that is, “all risks”).
Minimum insurance cover for CIP deliveries has therefore been increased for the benefit of the buyer. Parties are free to agree to have lower levels of insurance cover if they wish.
3. Acknowledging transportation by own transport in FCA, DAP, DPU and DDP deliveries
Amendments to Incoterms 2020
Incoterms 2010 were drafted on the assumption that, when goods are carried from the seller to the buyer, they would be carried by a third-party carrier engaged by the seller or the buyer. That did not account for situations, particularly in FCA, DAP, DPU and DDP deliveries, where a third-party carrier was not, in fact, required or contracted because the seller or the buyer would use its own transportation.
The new rules now cater for such situations by expressly providing for the arrangement of carriage as well as referring to the making of a contract of carriage.
4. Inclusion of security-related requirements within carriage obligations and costs
Amendments to Incoterms 2020
Incoterms 2020 aims to establish stronger security-related requirements than its predecessors. Now that security-related concerns are more prevalent in trade, this revision expressly provides for security-related obligations at A4 and A7 of each rule. As mentioned above, costs for these obligations will feature under A9/B9 of each rule.
5. Explanatory Notes for Users
Amendments to Incoterms 2020
The Guidance Notes that previously featured at the start of the individual Incoterms have now been amended to ‘Explanatory Notes for Users’. The Explanatory Notes set out the fundamentals of each of the relevant Incoterms, specifically:
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When it should be used
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When risk transfers
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How costs are allocated
The Explanatory Notes aim to help users choose the most appropriate Incoterms and provide guidance for interpretation if disputes arise.
6. Arrangement of provisions relating to costs
Amendments to Incoterms 2020
Costs have been rearranged in the 2020 revision. All costs relating to the various aspects of the sale are now listed at A9/B9 under each of the Incoterms, as well as under the relevant article within the Incoterms to which they apply.
The intention behind this change is to provide users with a complete list of costs in one place, so that the seller and the buyer are more aware of the costs for which each will be responsible under particular Incoterms.
7. Change from ‘DAT’ to ‘DPU’
Amendments to Incoterms 2020
There is a change to the order of the individual Incoterms in the new revision, so that DAP now appears before DAT to reflect the fact that delivery on DAP terms occurs before delivery on DAT terms.
The term ‘DAT’ has been changed to ‘DPU’, reflecting the fact that the destination for a DAT/DPU delivery could be at any place and not just a terminal. Of course, the place of delivery, if not a terminal, must be appropriate for the unloading of the goods.
As John W.H. Denton, General Secretary of the ICC, said when Incoterms 2020 were released: “Incoterms 2020 rules make business work for everyone by facilitating trillions of dollars in global trade annually. Because they help importers and exporters around the world to understand their responsibilities and avoid costly misunderstandings, the rules form the language of international sales transactions, and help build confidence in our valuable global trading system.”
The importance of Incoterms to trade is beyond doubt, even if many contracts do not incorporate them. To avoid uncertainty and disputes, trading companies should ensure they know the new Incoterms rules and make any amendments to their contracts and general terms and conditions that are necessary. It is important to ensure that the most appropriate Incoterms are selected for each contract and that they are fully understood before they are incorporated. These points are especially important now, as the changes take root.
Source: Baltic Exchange
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Thursday, 26 September 19
INDIA INCREASES ITS ANNUAL COAL PRODUCTION BY 2.7% PER YEAR FROM 850 MILLION SHORT TONS IN 2018 TO 2 BILLION SHORT TONS BY 2050 - EIA
Worldwide coal production holds steady at about 8 billion short tons, or 160 quadrillion British thermal units (Btu), per year through 2040. Inc ...
Wednesday, 25 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
In the past five months there has been significant activity in the asset market with the dry bulk segment being by far the most volatile in terms o ...
Tuesday, 24 September 19
9TH ANNUAL SUPPLY CHAIN INNOVATION SUMMIT 2019 ASIA PACIFIC
Summit: 9th Annual Supply Chain Innovation Summit 2019 Asia Pacific
Host: Ace Events
Website: http: ...
Monday, 23 September 19
SUPRAMAX: THE ASIAN ARENA IT WAS A SLOW START, BUT DEMAND INCREASED AS THE WEEK WENT ON - BALTIC BRIEFING
Capesize
The market trended down over this past week, breaking the market out of its upward trending range. While the market traded sideways at ...
Monday, 23 September 19
CHINA RECORDS SLOWER GROWTH IN COAL PRODUCTION - XINHUA
The growth of China’s raw coal production slowed down in August, data from the National Bureau of Statistics (NBS) showed.
Aro ...
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Showing 1326 to 1330 news of total 6871 |
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- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- Altura Mining Limited, Indonesia
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- PTC India Limited - India
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- IHS Mccloskey Coal Group - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Aditya Birla Group - India
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Eastern Coal Council - USA
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Planning Commission, India
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Goldman Sachs - Singapore
- Sakthi Sugars Limited - India
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- Medco Energi Mining Internasional
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Mercator Lines Limited - India
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Energy Link Ltd, New Zealand
- Semirara Mining Corp, Philippines
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- South Luzon Thermal Energy Corporation
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Sojitz Corporation - Japan
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Minerals Council of Australia
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- White Energy Company Limited
- Gujarat Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Economic Council, Georgia
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- Australian Coal Association
- Singapore Mercantile Exchange
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Sical Logistics Limited - India
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