Incoterms (International Commercial Terms) are fundamental to regulating international commercial transactions, providing a common and standardized language to define obligations, risks and costs between sellers and buyers. The latest version, Incoterms 2020 , introduced by the International Chamber of Commerce (ICC), includes essential updates to adapt to the modern needs of global trade.
What are Incoterms?
Incoterms define:
- Responsibilities of sellers and buyers regarding the delivery of goods.
- Risks associated with transportation, indicating the point at which the risk passes from the seller to the buyer.
- Costs associated with the movement of goods, including shipping, insurance, customs duties and other expenses.
Why Are Incoterms 2020 Important?
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Contractual Clarity
Incoterms eliminate ambiguity, reducing legal disputes. They clearly specify who is responsible for what, improving transparency in transactions. -
Adaptability to Modern Logistics Chains
With the rise of e-commerce and international shipping, Incoterms 2020 include terms suitable for complex modes of transport, such as multimodal transport. -
Risk Reduction
By specifying the point of risk transfer, the terms help parties better plan their insurance strategies. -
Regulatory Compliance Support
Incoterms are in line with international and national regulations, facilitating compliance with customs and tax laws.
What's New in Incoterms 2020
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New Terms for Multimodal Transport
The term FCA (Free Carrier) now includes an option that allows the buyer to request an onboard bill of lading, useful in ocean shipments. -
Focus on Security and Insurance
Greater attention has been paid to safety requirements and insurance coverage, which are essential for transport in risk areas. -
Separation of Costs and Responsibilities
The list of associated costs is now more detailed to improve transparency.
How to Use Incoterms 2020?
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Select the Right Term
Choose the term that best suits your transaction, considering transportation methods, risks and costs. -
Specify it in the Contract
Clearly indicate the Incoterms term in the contract, specifying the 2020 edition to avoid misunderstandings. -
Form the Team
Ensure your team is trained in using Incoterms to effectively manage transactions.
Incoterms 2020 are an indispensable tool for international trade, promoting clear and professional management of transactions. Adopting them correctly means minimizing risks, optimizing costs and ensuring compliance with international regulations.