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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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Wednesday, 04 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
For yet another time, the market seems to have its own drivers. After a very disappointing first half, the recent recovery in the shipping market i ...
Tuesday, 20 August 19
NORDEN HAS BEEN AWARDED A 3-YEAR CONTRACT FOR THE TRANSPORTATION OF COAL FROM INDONESIA TO HONG KONG
NORDEN has been awarded a 3-year contract with a power company in Hong Kong for the transportation of coal from Indonesia to Hong Kong.
...
Tuesday, 20 August 19
THE AUGUST 2019 INDONESIAN COAL PRICE REFERENCE POSTS THE FIRST MONTHLY GAIN SINCE AUGUST 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised up the benchmark price of Indonesian thermal co ...
Monday, 19 August 19
INDONESIAN COAL RUNS, A 82,000DWT SHIP WAS FIXED DELIVERY CHINA VIA INDONESIA, REDELIVERY JAPAN, IN THE MID $16,000S - BALTIC BRIEFING
Capesize
The Capesize market was buoyant in both basins this week, posting gains across the board. After bottoming out the previous week, rates ...
Sunday, 11 August 19
ULTRAMAX: A 58,000DWT VESSEL OPEN KEMAMAN FIXED FOR TWO TO THREE LADEN LEGS, REDELIVERY SINGAPORE-JAPAN, AT $12,250 - BALTIC BRIEFING
Capesize
With typhoon Lekima gathering pace, numerous China ports were closed by the end of the week and will likely be for two to three days. ...
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Showing 1346 to 1350 news of total 6871 |
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- Xindia Steels Limited - India
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Edison Trading Spa - Italy
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- TeaM Sual Corporation - Philippines
- Coastal Gujarat Power Limited - India
- ICICI Bank Limited - India
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Ind-Barath Power Infra Limited - India
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- Planning Commission, India
- PTC India Limited - India
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Bulk Trading Sa - Switzerland
- Aditya Birla Group - India
- Central Java Power - Indonesia
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Miang Besar Coal Terminal - Indonesia
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- White Energy Company Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Mjunction Services Limited - India
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
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