With each passing year, newer supply chain and logistics technologies emerge to increase transparency and reduce delays moving valuable assets at every stage.
However, the reality is that newer complications have also arisen and these required stronger measures to keep things simple.
Such was the case when the International Chamber of Commerce (ICC) updated this year’s Incoterms®.
Incoterms® – A Quick Review
Short for International Commercial Terms, Incoterms® represent the body of rules defining the responsibilities and obligations of all parties that have contractually signed in global supply chains. Among these types of parties include, but are not necessarily limited to:
- Sellers and Resellers
In addition, the Incoterms® are also important for whoever shall provide legal representation in the event of disputes among the above mentioned parties.
Knowledge of these terms is crucial for contracts enabling the international sale of all transported goods. They also provide the guidelines when it comes to allocating the costs and risks among all members of the chain.
To date, there are 11 active Incoterms® that apply to today’s international trade. Starting January 1, 2020, the ICC has implemented a new set of rules intent on updating these Incoterms® in light of new practices and technologies. This is so that the rules continue to take effect but are easier to understand and communicate across increasingly complex and digitised supply chains.
Therefore, it is highly advised that organisations that depend on international trade should immediately contact their logistics partners and experts regarding the new Incoterm® rules. It can help smooth out new wrinkles from innovations you may have implemented in your supply chains.