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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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Sunday, 26 May 19
SUPRAMAX: A LIMITED ACTIVITY WAS REPORTED, WITH THE UPCOMING INDONESIAN HOLIDAYS SLOWING COAL MOVEMENTS - BALTIC BRIEFING
Capesize
The past week marked one of the busier periods for Capesizes this year. With a subdued start due to a public holiday in Singapore on M ...
Wednesday, 22 May 19
SHIPPING MARKET INSIGHT - INTERMODAL
The ship repair sector is showing a constant and gradual increase on the workload throughout the past months, with almost all the shipyards worldwi ...
Saturday, 18 May 19
SUPRAMAX: 56,000DWT OPEN PANJANG FIXING AT $10,500 FOR A TRIP VIA INDONESIA, AND REDELIVERY CHINA - BALTIC EXCHANGE
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The market continues to ebb and flow with a generally positive up trend. The Capesize 5TC opened with upward momentum from last week&r ...
Friday, 17 May 19
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 16 May 19
SUPRAMAX: INDO/CHINA COAL RV TRADING AROUND US$ 9,000 BSS S.CHINA DELIVERY - FEARNLEYS
Capesize
This volatile segment is trying to find a clear direction from the present US$ 12,000/day earnings for standard units says Fearnleys W ...
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Showing 1396 to 1400 news of total 6871 |
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- Petrochimia International Co. Ltd.- Taiwan
- Asmin Koalindo Tuhup - Indonesia
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Malabar Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Planning Commission, India
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- Independent Power Producers Association of India
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- Vizag Seaport Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- Bangladesh Power Developement Board
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Coal Council - USA
- Semirara Mining Corp, Philippines
- Mercator Lines Limited - India
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- CNBM International Corporation - China
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- Agrawal Coal Company - India
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Australian Coal Association
- Central Electricity Authority - India
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Sarangani Energy Corporation, Philippines
- Kobexindo Tractors - Indoneisa
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