Sourcing & Product Marketing
Procurement & Logistics
Incoterms 2000:
What has changed?
The answer is 100 changes, but in reality very little. A major overhaul of Incoterms was done in the last go-round in 1990. Most of the changes to Incoterms 2000 are a tidying-up to eliminate inconsistencies and streamline some terms. No terms were eliminated, nor new terms added.
Reynolds, who was the only U.S. member of the ICCs (International Chamber of Commerce) Drafting Party and Working Group assigned to revise the terms, emphasizes to U.S. exporters, Dont start with trying to learn the differences between 1990 and 2000. Start from scratch. The first responsibility of export pros is to learn Incoterms 2000.
A couple of important technical changes:
These changes are logical, because it makes more sense for the seller to deal with his own government with respect to export clearance (i.e. compliance with U.S. export controls) and the buyer to deal with his government on import clearance.
Trend toward Omni-Modal Terms.
The trend now in Incoterms is away from the more traditional marine-only terms, such as FOB and CIF (Cost, Insurance and Freight), toward omni-modal terms. Reflecting the growth of intermodal transportation logistics, these newer terms can be used for all forms of transportation; ships, planes, trains, trucks, not just for a ship.
These include:
The New and Improved FCA.
The term FCA (Free Carrier) has been simplified under Incoterms 2000. Instead of seven delivery options, there are just two:
FCA should gradually replace such commonly used terms as EXW (Ex Works) and FOB. The principal difference between FCA, Sellers Factory and Ex Works is that the responsibility for compliance with U.S. Export controls is assigned to the seller who is in the best position to do so, not the buyer.
Back to Incoterms.
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