Transportation & Logistics Analysis

Amending the ICC 2020 Incoterms: what are the trends?

March 15 2019

Unshakably, every decade, the International Chamber of Commerce (ICC) gets working on revising the Incoterms on commercial transactions. Discover the outlook of Jérôme de Ricqlès on the potential evolutions of this revision.

It gives the organization the opportunity to include the evolution of international commercial habits in their rules, so as to offer the highest level of clarity on formalizing an export sales price for parties to a commercial transaction.

What are the Incoterms ?

The fundamental purpose of the Incoterms is to outline a sales price by defining, in the most analytical way possible, the risk and costs transfer for the merchandise. This does not have a direct impact on the nature of the shipping agreement, or on the transfer of ownership rights over the goods.

Let’s keep in mind that the shipping agreement is a consequence of the sales agreement, not the other way around.

The last revision, which happened in 2010, led to the creation of 11 Incoterms covering all the different situations that may occur (there was 13 Incoterms in the previous revision, in 2000). It’s important to note that the contracting parties can still use the version of the Incoterms that they prefer (ever the much older ones). They just have to state which version they wish to use.

The Incoterms are meant for an international use, as opposed to domestic commercial transactions.

Following this mindset, the ICC also restates that the Incoterms are only meant for B2B transactions. Therefore, the international B2C e-commerce boom falls outside of the Incoterms’ scope.

With the Belt & Road Initiative underway, China has an active role in the current revision. They are also very focused on the digital issues at stakes (EDI…API…). Additionally, cyber security is at the center of the debates, after the massive attacks that targeted some loaders and several maritime carriers (Maersk, Damco, Renault…).

Going from 4 to 3 Incoterms “categories” (the E will no longer be part of the classification, as opposed to the existing EFCD) is a possibility at this stage in the preparation of the revision.

Let’s take a closer look at each Incoterm category to identify what may change with this new revision, 9 months before its entry into force :

Subscribe to the newsletter

Expert in Ocean shipping for 25 years, Jerome puts all his knowledge of the industry to contribution for Upply. Ship captain at heart, he has written the English-French Lexicon of Containerized Shipping (Paris: CELSE, 2001).
See all its articles