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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, 20 March 19
COAL EXPORT FEARS RESURFACE AS RESTRICTIONS HIT MORE CHINESE PORTS AND AUSTRALIAN PRICES COP A 'BELTING' - ABC
Australian thermal coal exports to China are under increasing pressure, with indications import restrictions are spreading to other key ports.
...
Monday, 18 March 19
A 56,000DWT SHIP FIXED DELIVERY FOR A SINGAPORE TRIP VIA INDONESIA, RE-DELIVERY CHINA, AT $10,000 - BALTIC BRIEFING
Capesize
The Baltic Capesize market shrugged off its recent negative sentiment to post daily incremental improvements over the last week. Pacif ...
Saturday, 16 March 19
AUSTRALIAN COAL STILL FACING CHINESE DELAY - AAP
Australian coal exports to China are still facing delays, with protectionism and environmental checks blamed for the slowdown.
Coal ...
Thursday, 14 March 19
SUPRAMAX: INDO COAL CARGOES GETTING FIXED AT AROUND US$ 12000 TO CHINA - FEARNLEYS
Capesize
Average daily earning still well below operating costs, and owners keep bleeding - but nevertheless finally some bright spots for the ...
Monday, 11 March 19
SUPRAMAX: A 61,000 DWT VESSEL WAS BOOKED SINGAPORE FOR A TRIP VIA INDONESIA TO CHINA AT $10,500 - BALTIC BRIEFING
Capesize
A faint glimmer of hope with the suggestion the market may have finally bottomed out, with owners attempting to resist further cuts in ...
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Showing 1446 to 1450 news of total 6871 |
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- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- PNOC Exploration Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- Aditya Birla Group - India
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- PetroVietnam Power Coal Import and Supply Company
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Parry Sugars Refinery, India
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Australian Coal Association
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Goldman Sachs - Singapore
- Globalindo Alam Lestari - Indonesia
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- Coalindo Energy - Indonesia
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercuria Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- Madhucon Powers Ltd - India
- Independent Power Producers Association of India
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Planning Commission, India
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Singapore Mercantile Exchange
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Romanian Commodities Exchange
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
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