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| Incoterms 2010 |
Every 10 years ICC (International Chamber of Commerce) reviews the incoterms to see if the terms still relate
to the current world practices and trends. After it's review they felt that an update was required. The incoterms
2010 sub title states "for the use of domestic and international trade terms."
This relates only to some aspects in certain trade blocks. Eg. The European Union has a number of countries
in that trade block where they do not have a customs border. It's a free trade zone so some of the incoterms
does not relate well with their circumstances.
The experienced practicing traders found the new terms to be ambiguous, contradictory and antonymous as it
relates to the intermediary trading practice and business. It is felt that no one in the ICC had traded for any
length of time as a private intermediary and is writing rules lacking the on hands experience and understanding
of problems the intermediary experience in the every day business of commodity trading. Some poorly applied
reference are made to involve the intermediary but really nothing substantial.
We here at Trader Commodity can firmly state that with all the chances implied in the new release of incoterms
2010, it has made no major changes that will affect the proper trading procedures we practice and advise
for the international trading intermediary.
The New Incoterms 2010
• Ex Works (EXW)
• Free Carrier, (Named Place:) Seller's Premises or Named Place of Origin (FCA)
• Free Alongside Ship, (Named Port of Shipment) (FAS)
• Free on Board, (Named Port of shipment) (FOB)
• Cost and Freight, (Port of Destination) (CFR)
• Cost, Insurance and Freight, (Port of Destination) (CIF)
• Carriage Paid To, (Named Place of Destination) (CPT)
• Carriage and Insurance Paid To, (Named Place of Destination) (CIP)
• Delivered at Frontier, (Named Place of Destination) (DAF)...Removed
• Delivered Ex Ship, (Named Place of Destination) (DES)...Removed
• Delivered Ex Quay, (Named Place of Destination) (DEQ)...Removed
• Delivered Duty Unpaid, (Named Place of Destination) (DDU)...Removed
• Delivered Duty Paid, (Named Place of Destination) (DDP)
Rules for Any Mode of Transport (ships, planes, trucks or trains)
CIP - Carriage and Insurance Paid... (container term) for FOB
CPT - Carriage Paid To
DAP - Delivered At Place (NEW) (Just like “DES” and "DEQ" intermediaries shall not deal in DAP transaction.)
DAT - Delivered At Terminal (NEW) (just like "DAF" and "DDU" intermediaries shall not deal in DAT transaction)
DDP - Delivered Duty Paid
EXW - Ex Works
FCA - Free Carrier ... (container term) for FOB
The intermediary needs to mostly stay with FOB applications and CFR delivery modes
Rules for Sea and Inland Waterway Transport Only
CFR - Cost and Freight
CIF - Cost, Insurance and Freight
FAS - Free Alongside Ship
FOB - Free On Board
Actually next to nothing has changed between incoterrms 2000 and 2010 for the intermediary because the wants of
the end buyer is made to the supplier and the offer of a supplier is mirrored to the end buyer through the
intermediary.
It is stipulated in the incoterms 2010 that the intermediary fails to apply the correct terms.
"CIP" (Carriage and Insurance Paid) is the container term for "CIF" (Cost Insurance and Freight)
"FCA" (Free Carrier) is the container term for "FOB " (Free on Board)
The 2010 incoterrms is available through ICC "international Chamber of Commerce". The new rules are effect as of
Jan 1, 2011.
to the current world practices and trends. After it's review they felt that an update was required. The incoterms
2010 sub title states "for the use of domestic and international trade terms."
This relates only to some aspects in certain trade blocks. Eg. The European Union has a number of countries
in that trade block where they do not have a customs border. It's a free trade zone so some of the incoterms
does not relate well with their circumstances.
The experienced practicing traders found the new terms to be ambiguous, contradictory and antonymous as it
relates to the intermediary trading practice and business. It is felt that no one in the ICC had traded for any
length of time as a private intermediary and is writing rules lacking the on hands experience and understanding
of problems the intermediary experience in the every day business of commodity trading. Some poorly applied
reference are made to involve the intermediary but really nothing substantial.
We here at Trader Commodity can firmly state that with all the chances implied in the new release of incoterms
2010, it has made no major changes that will affect the proper trading procedures we practice and advise
for the international trading intermediary.
The New Incoterms 2010
• Ex Works (EXW)
• Free Carrier, (Named Place:) Seller's Premises or Named Place of Origin (FCA)
• Free Alongside Ship, (Named Port of Shipment) (FAS)
• Free on Board, (Named Port of shipment) (FOB)
• Cost and Freight, (Port of Destination) (CFR)
• Cost, Insurance and Freight, (Port of Destination) (CIF)
• Carriage Paid To, (Named Place of Destination) (CPT)
• Carriage and Insurance Paid To, (Named Place of Destination) (CIP)
• Delivered at Frontier, (Named Place of Destination) (DAF)...Removed
• Delivered Ex Ship, (Named Place of Destination) (DES)...Removed
• Delivered Ex Quay, (Named Place of Destination) (DEQ)...Removed
• Delivered Duty Unpaid, (Named Place of Destination) (DDU)...Removed
• Delivered Duty Paid, (Named Place of Destination) (DDP)
Rules for Any Mode of Transport (ships, planes, trucks or trains)
CIP - Carriage and Insurance Paid... (container term) for FOB
CPT - Carriage Paid To
DAP - Delivered At Place (NEW) (Just like “DES” and "DEQ" intermediaries shall not deal in DAP transaction.)
DAT - Delivered At Terminal (NEW) (just like "DAF" and "DDU" intermediaries shall not deal in DAT transaction)
DDP - Delivered Duty Paid
EXW - Ex Works
FCA - Free Carrier ... (container term) for FOB
The intermediary needs to mostly stay with FOB applications and CFR delivery modes
Rules for Sea and Inland Waterway Transport Only
CFR - Cost and Freight
CIF - Cost, Insurance and Freight
FAS - Free Alongside Ship
FOB - Free On Board
Actually next to nothing has changed between incoterrms 2000 and 2010 for the intermediary because the wants of
the end buyer is made to the supplier and the offer of a supplier is mirrored to the end buyer through the
intermediary.
It is stipulated in the incoterms 2010 that the intermediary fails to apply the correct terms.
"CIP" (Carriage and Insurance Paid) is the container term for "CIF" (Cost Insurance and Freight)
"FCA" (Free Carrier) is the container term for "FOB " (Free on Board)
The 2010 incoterrms is available through ICC "international Chamber of Commerce". The new rules are effect as of
Jan 1, 2011.