Incoterms: Framework for Success January 27, 2011 Presenter: Steve Rubinson Licensed US Customs Broker By PresenterMedia.com
Nov 08, 2015
Incoterms: Framework for Success January 27, 2011
Presenter: Steve Rubinson Licensed US Customs Broker
By PresenterMedia.com
Who is the International Chamber of Commerce
(ICC)?
http://www.iccwbo.org/
Goals for this session: 1. ASK QUESTIONS! 2. PARTICIPATE In The Discussion! 3. Learn more about using Incoterms rules as a tool to
effectively perform international business 4. Equip ourselves to become more effective
international business-people
Why are we here?
Critical Success Factors for International Business Transactions Senior management commitment doing business internationally is more demanding, and requires different resources, skills and experience than domestic transactions. Effective and accurate information flows protect your ability to do business internationally. Service providers can make or break your international sales. Choose them well. Using clear Incoterms rules reduces uncertainty between the international buyer and seller.
Successful International
Business Transactions
Senior-Level Commitment
Information Flows
Service Providers
Incoterms Rules
Introduction
Where are Incoterms rules used?
INCOTERMS Rules
Who uses Incoterms rules?
What are Incoterms rules?
When are Incoterms rules used?
Why are Incoterms rules useful for international business?
Five Questions To Answer
Who?
What?
Where?
When?
Why?
Business owners Customer service Finance Senior executives Sales Logistics Trade Compliance
Who?
Many people involved in your business can
benefit from understanding Incoterms rules
What?
Incoterms rules are a set of internationally recognized ways to describe business
transactions
Source: http://www.iccwbo.org/incoterms
IncotermsInternational Commercial Terms
The Incoterms rules are an internationally recognized standard and are used worldwide in international and domestic contracts for the sale of goods. First published in 1936, Incoterms rules provide internationally
accepted definitions and rules of interpretation for most common commercial terms.
The rules have been developed and maintained by experts and practitioners brought together by ICC and have become the standard in
international business rules setting. They help traders avoid costly misunderstandings by clarifying the tasks, costs and risks involved in the
delivery of goods from sellers to buyers. Incoterms rules are recognized by UNCITRAL as the global standard for the interpretation of the most common
terms in foreign trade. Please note that all contracts made under INCOTERMS 2000 remain valid
even after 2011. Moreover, although we recommend using Incoterms 2010 after 2011, parties to a contract for the sale of goods can agree to
choose any version of the Incoterms rules after 2011. It is important however to clearly specify the chosen version INCOTERMS 2010, INCOTERMS 2000
or any earlier version.
Incoterms 2000 Rules Chart 1 TERM
SERVICE
EXW Ex-Works
FCA Free Carrier
FAS Free Alongside Ship
FOB Free On-Board Vessel
CFR Cost & Freight
CIF Cost Insurance & Freight
CPT Carriage Paid to
WhoPays WhoPays WhoPays WhoPays WhoPays WhoPays WhoPays
Warehouse storage at point of origin
Seller Seller Seller Seller Seller Seller Seller
Warehouse labor at point of origin
Seller Seller Seller Seller Seller Seller Seller
Export packing Seller Seller Seller Seller Seller Seller Seller
Loading at point of origin Buyer Seller Seller Seller Seller Seller Seller
Inland freight Buyer Buyer Seller Seller Seller Seller Seller
Port receiving charges Buyer Buyer Seller Seller Seller Seller Seller
Forwarders fee Buyer Buyer Seller Seller Seller Seller Seller
Loading on ocean carrier Buyer Buyer Buyer Seller Seller Seller Seller
Ocean/Air freight charges Buyer Buyer Buyer Buyer Seller Seller Seller
Charges at foreign Port/Airport
Buyer Buyer Buyer Buyer Buyer Buyer Seller
Customs, Duties & Taxes abroad
Buyer Buyer Buyer Buyer Buyer Buyer Buyer
Delivery charges to final destination
Buyer Buyer Buyer Buyer Buyer Buyer Buyer
Incoterms 2000 Rules Chart 2 TERM
SERVICE
CIP Carriage & Insurance Paid To
DAF Delivery At Frontier
DES Delivered Ex-Ship
DEQ Delivered Ex-Quay, Duty Unpaid
DDU Delivered Duty Unpaid
DDP Delivered Duty Paid
WhoPays WhoPays WhoPays WhoPays WhoPays WhoPays
Warehouse storage at point of origin
Seller Seller Seller Seller Seller Seller
Warehouse labor at point of origin
Seller Seller Seller Seller Seller Seller
Export packing Seller Seller Seller Seller Seller Seller
Loading at point of origin Seller Seller Seller Seller Seller Seller
Inland freight Seller Seller Seller Seller Seller Seller
Port receiving charges Seller Seller Seller Seller Seller Seller
Forwarders fee Seller Seller Seller Seller Seller Seller
Loading on ocean carrier Seller Seller Seller Seller Seller Seller
Ocean/Air freight charges Seller Seller Seller Seller Seller Seller
Charges at foreign Port/Airport
Seller Seller Buyer Seller Seller Seller
Customs, Duties & Taxes abroad
Buyer Buyer Buyer Buyer Buyer Seller
Delivery charges to final destination
Buyer Buyer Buyer Buyer Seller Seller
Incoterms 2010 Rules Part 1
RULES FOR ANY MODE OR MODES OF TRANSPORT
EXW EX WORKS FCA FREE CARRIER CPT CARRIAGE PAID TO CIP CARRIAGE AND INSURANCE PAID TO DAT DELIVERED AT TERMINAL DAP DELIVERED AT PLACE DDP DELIVERED DUTY PAID
Incoterms 2010 Rules Part 2
RULES FOR SEA AND INLAND WATERWAY TRANSPORT
FAS FREE ALONGSIDE SHIP FOB FREE ON BOARD CFR COST AND FREIGHT CIF COST INSURANCE AND FREIGHT
INCOTERMS Rules Comparison
Incoterms 2010 rules
For both domestic and international transactions 11 rules in 2 categories Eliminates Ships Rail term Addition of guidance notes for each Incoterms rule
Incoterms 2000 rules
Primarily for international transactions 13 rules in 4 categories Ships Rail terminology used
The International Chamber of Commerce has the support of a global membership Incoterms rules are recognized and used on agreement by ICC members and non-members alike No membership fees or costs to use Incoterms rules
Where?
Anywhere you do business!
There is no time like the present! Consider adopting Incoterms rules as a matter of company policy Global implementation is not required. Incoterms rules may be implemented regionally, locally or even in selected shipping lanes Many companies use Incoterms rules only to ship internationally
When?
Use Incoterms rules when you buy or sell
anything domestically or internationally
Benefits of using Incoterms rules:
1.Standardize how you do business 2.Strengthen internal controls 3.Avoid delays caused by problems with documentation 4.Prevent disputes over who pays for what 5.Protect your ability to do business internationally 6.Declare the correct value for imports and exports the first time!
Why?
Incoterms rules can make the difference
between success and failure.
QUESTIONS?