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Introduction to INCOTERMS 2020

Name: Introduction to INCOTERMS 2020
Rating: 4.4 (16 reviews)

Managing Transport Related Terms of Trade In Local and International Sales Contracts

Created byHamed Alavi

Last updated 8/2024

English

English [Auto],

What you'll learn

What Are INCOTERMS Rules in Practice? What Do They Do? And What Don't They Do ?
What Are The Responsibilities of Buyer and Seller Under Each INCOTERMS Rule (2020)?
Where and How Do We Apply The INCOTERMS Rules ? What Is The Consequence of Choosing a Wrong INCOTERMS Rule ?
Where And When Does The Cost And Risk Pass From Seller To The Buyer Under Each INCOTERM 2020 Rule?
What Are The Most Well-known Existing Variables Of INCOTERMS Rules Under National Laws ? How To Prevent Their Application Into the Sales Contract ?
What Is The Criteria For Choosing A Suitable INCOTERMS Rule For A Given Contract ?

Course content

5 sections • 30 lectures • 1h 7m total length

Introduction4:08
Explore the Incoterms 2020 framework to clarify who pays transport and insurance costs, when risk passes from seller to buyer, and who handles export and import formalities in international sales.

History of The INCOTERMS Rules2:50
Trace the history of the incoterms rules from 1936 to the 2020 edition, noting ICC's additions of non maritime, air and container terms and revisions like FOB airport and FCA.
What Are The INCOTERMS Rules?2:07
Explore how Incoterms 2020 define 11 three-letter rules that allocate transport costs, risks, and responsibilities between buyers and sellers, including ddp and sea-only options.
Where Do You Find The INCOTERMS Rules?0:39
Explore how Incoterms rules relate to export-import processes and inter-related contracts, including contract cells, transport, and letter of credit, plus proforma and commercial invoices.
Who Is Influenced by Application Of The INCOTERMS Rules?0:47
Incoterms rules bind the seller and buyer in the sale contract. Shippers inform the carrier of the incoterms route; CIA and CIPA insurance duties are separate from incoterms.
What Is The Proper Way Of Using The INCOTERMS Rules?1:43
Learn how to correctly reference Incoterms 2020 in international sales contracts by specifying the chosen rule, the place of delivery, and the version, and understand risk transfer rules.
Why Should Traders Have a Proper Understanding of The INCOTERMS Rules?1:34
Traders must grasp Incoterms rules and specify the exact version in contracts to clarify costs, risks, and responsibilities and prevent disputes over interpretation and applicable law.
What Don't The INCOTERMS Rules Do?1:12
Clarify what Incoterms do not do, per the ICC guard on Incoterms 2020. Identify that they do not substitute the sales contract, address payment terms, remedies, or dispute resolution.

A/B1 General Obligations1:16
The lecture outlines seller and buyer roles across ten Incoterms articles, with A1 to A10 defining obligations; the sales contract governs duties and documents may be paper or electronic.
A2/B2 Delivery2:35
The delivery article explains Incoterms 2020 delivery concepts, including place of delivery, handover versus place at disposal, risk transfer, loading, and packaging duties across E, F, C, and D rules.
A3/B3 Transfer of Risk1:20
Explains how incoterms 2020 determine transfer of risk from seller to buyer, including premature risk transfer when the buyer fails to nominate a carrier or obtain export and import clearances.
A4/B4 Carriage2:12
Explain how Incoterms 2020 allocate transport responsibilities and delivery points between seller and buyer, including who arranges transport, security considerations, and FCA, EFF rules, C, D, and E rules.
A5/B5 Insurance6:09
Explore how Incoterms 2020 assign risk and require cargo insurance, including Institute Cargo Clauses A, B, and C, war and civil unrest clauses, open versus specific policies, and cover notes.
A6/B6 Transport Document1:11
Incoterms 2020 does not define how to hand over the transport document. Buyer can require carrier to provide transport document to seller, promoting FCA over FOB for container goods.
A7/B7 Customs Clearance1:09
Explore transit and import/export clearance rules, including permits and formalities required by authorities, with seller or buyer responsibilities for export, import, and transit clearance and U.S. import security filing requirements.
A8/B8 Checking/Packing/Marking0:32
the seller must perform all delivery checks, measure the vehicle, and pack the goods, ensuring suitability for the mode of transport, while buyer post-delivery checks are not addressed.
A9/B9 Allocation Of Costs0:49
Allocates costs, duties, and clearance under incoterms, detailing container and terminal handling costs, transport and security costs, and CHF and CERP insurance, with Stellar, CND rules, and FCA delivery guidance.
A10/B10 Notices1:49
Understand A10/B10 notices and how sellers inform buyers of delivery under F and C rules, while buyers inform delivery time and place under other rules, as delivery method drives risk.

EX Work2:03
Ex works terms impose minimal seller obligations, with delivery at the buyer's disposal and risk passing when goods are identified, while loading is not required.
Free Carrier (FCA)4:34
Learn free carrier (FCA) under Incoterms 2020 for container goods, where the buyer handles main transport and delivery can occur at seller's premises. Risk transfers on delivery.
Carriage Paid To (CPT)2:04
Carriage paid to (CPT) is an incoterm where the seller contracts and pays for transport to the named place, with risk transferring at handover and export clearance by the seller.
Carriage And Insurance Paid To (CIP)2:22
Clarify the CIP incoterms: the seller delivers to the carrier, pays carriage to destination in container transport, and procures insurance for the buyer, with risk passing at delivery.
Delivered At Place (DAP)2:33
Explore delivered at place (dap) under incoterms 2020. The seller delivers at the named destination, and risk passes on arrival; export clearance is seller's, import clearance is the buyer's.
Delivered At Place Unloaded1:57
Dpu, a multimodal rule in incoterms 2020, requires the seller to unload at the destination, transferring risk to the buyer and bearing export formalities up to delivery.
Delivered Duty Paid (DDP)2:22
Delivered duty paid (ddp) under incoterms 2020 assigns the seller export and import clearance, duties, and vat to the named destination, with risk passing to the buyer at delivery.
Free Alongside Ship (FAS)2:31
Explain free alongside ship (fas) under incoterms 2020, where the seller places goods alongside the buyer-nominated vessel, risks pass on delivery, and export clearance rests with the seller.
Free On Board (FOB)5:16
Learn how free on board (FOB) under incoterms 2020 transfers delivery and risk when goods are loaded on board a buyer-nominated vessel, and why FCA may suit non-sea shipments.
Cost and Freight (CFR)1:29
Explain Incoterms 2020 CFR: seller pays freight to destination, delivers on board at loading port, risk passes at delivery; export clearance, import clearance, and terminal handling costs.
Cost Insurance and Freight (CIF)2:26
Explore cost, insurance, and freight (CIF) concepts within Incoterms 2020, including risk transfer, contract of carriage, and insurance up to the port of destination.

Requirements

Basic Knowledge of International Trade

Description

Many kinds of Trade require transport of goods in domestic market or internationally. If you are in similar type of business, probably , you need to find answer to few critical questions anytime entering a contract negotiation process. Questions like :

1- Who is going to take care of Transport Costs ? Specially , costs related to loading and discharge of cargo at departure and destination ?

2- Shall we insure the goods in transit ? If yes , who will pay for insurance costs? and for what type of insurance cover ?

3- When and where will the risk of loss and damage to cargo pass from seller to the buyer?

4- When are where will the title and ownership to cargo pass from seller to the buyer?

5- Who will be responsible for taking import and export clearances and paying relevant duties?

6- Is there any standard framework to provide a uniform picture for answering these questions when different markets and trades follow different customs and regulations?

In conclusion , "What are the components of sales price offered by seller to the buyer ?"

Believe it or not , you are not alone.

Almost everyone who enters a contract negotiation process involving cargo transport (specially in import/export business) is facing similar questions.

The problem is getting bigger as we notice that not only customs and regulations differ in different markets , but also , understanding from a single term of trade might be totally different for parties to the very same trade contract.

International Chamber of Commerce introduced INCOTERMS Rules in 1936 to prevent unpleasant surprises, form a standard framework for negotiating transport related clauses in international and domestic contracts , plus , creating a uniform picture for parties to trade contracts (which need cargo transport )on how, when and where do risks , costs and responsibilities pass from seller to the buyer ? Ever since , the INCOTERMS Rules are gone through periodic revisions to reflect developments and new requirements in the world of trade. Current revision of rules also known as INCOTERMS 2020 was published in September 2019.

ICC claims that main reason for introduction of INCOTERMS Rules is to offer uniform answers to transport related questions of parties to trade contracts at global level. However, history of INCOTERMS Rules shows that rules are generally misunderstood by users resulting creation of further problems in trade process for traders. This course is aims at providing participants with a comprehensive undertesting from INCOTERMS Rules in a concise and precise manner using a simple language.

If you are international trade professional, purchasing agent , international sales team member, international sales contract professional , logistics and transport professional , international finance professional , lawyer or a business and law student , this course is for you .

Because , at the end of this course , you will have answer to following questions :

1- What are the INCOTERMS Rules?

2- What do they do and what don't they do?

3- How are they used in international (and domestic) sales contracts?

4- What are the consequences of using wrong INCOTERMS Rule in your contract ?

5- When and where do risks , costs and responsibilities to cargo in transit will pass from seller to the buyer under each of INCOTERMS 2020 Rules ?

6- What are different variations of INCOTERMS Rules and what do they mean under different national laws?

7- What is the criteria for choosing most suitable INCOTERMS 2020 Rule in your sales contract?

Who this course is for:

International Trade Professionals
International Finance Professionals
Procurement Professionals
Logistics and Supply Chain Professionals
International Contract Professnioals
Lawyers
Business And Law Students

Introduction to INCOTERMS 2020

What you'll learn

Explore related topics

Course content

Introduction1 lecture • 4min

Principles of INCOTERMS Rules7 lectures • 11min

Obligations of Buyer and Seller Under The INCOTERMS 202010 lectures • 19min

Detailed Review of The INCOTERMS Rules (2020)11 lectures • 30min

Conclusions1 lecture • 4min

Requirements

Description

Who this course is for: