INCOTERMS 2010 REVISION

The International Chamber of Commerce (ICC), considering the changes in global trade, has revised the Incoterms 2000 rules to meet contemporary needs. The revised clauses were published at the end of September and came into force on January 1, 2011.

As is known, the delivery terms used in foreign trade under Incoterms 2000 were divided into 4 main groups (E, F, C, and D) and consisted of a total of 13 rules: EXW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DAF, DES, DEQ, DDU, and DDP.

In Incoterms 2010, the delivery terms were restructured into 2 main groups. Four existing terms (DAF, DES, DEQ, DDU) were eliminated and replaced with DAP (Delivered at Place) and DAT (Delivered at Terminal), reducing the total number of rules from 13 to 11.

Rules for Any Mode or Modes of Transport:

  • EXW - Ex Works - Delivered at Factory
  • FCA - Free Carrier - Delivered to the Carrier
  • CPT - Carriage Paid To - Freight Paid
  • CIP - Carriage and Insurance Paid To - Freight and Insurance Paid
  • DAT - Delivered At Terminal - Delivered at Terminal
  • DAP - Delivered At Place - Delivered at a Specified Place
  • DDP - Delivered Duty Paid - With Customs Duties Paid

Rules for Sea and Inland Waterway Transport:

  • FAS - Free Alongside Ship - Delivered Alongside the Ship
  • FOB - Free On Board - Delivered by Loading on Board
  • CFR - Cost and Freight - Cost and Freight Paid
  • CIF - Cost, Insurance And Freight - Cost, Insurance, and Freight Paid

As part of this revision, the ICC has clearly divided these 11 terms into two groups to avoid confusion:

  1. For sea and inland waterway transport: FOB, FAS, CFR, and CIF.
  2. For all other modes of transport (and also for sea and waterway transport where appropriate): EXW, FCA, CPT, CIP, DAT, DAP, DDP.

Additionally, Incoterms 2010 modernized the rules for FOB, CFR, and CIF regarding the point of risk transfer. It stipulates that for risk to be transferred, the goods must be properly loaded on board the vessel.

It has also introduced provisions to determine which party bears the costs related to security measures against terrorist attacks in the international transport chain by adding specific lines to certain clauses.

A very significant change was made within the FAS, FOB, CFR, and CIF rules. Under INCOTERMS 2000, the delivery point for these rules was defined as "the point where the goods pass the ship's rail". In the INCOTERMS 2010 document, the place of delivery is stated as "on board" the vessel.

Another important change brought by Incoterms 2010 is the emphasis on the applicability of the rules to both domestic and international sales contracts. This reflects the reality that customs formalities have become less significant in trade blocs like the European Union.

The innovations in Incoterms 2010 include the classification of the clauses into seven multimodal rules applicable to all transport modes, and four clauses applicable only to sea and inland waterway transport.