In an ICC podcast to mark the launch of the Incoterms® 2020 rules in September, Emily O’Connor, Director of Trade and Investment for the International Chamber of Commerce (ICC), said that “people will frequently choose the wrong Incoterms® rule for their transaction”.
O’Connor went on to emphasise the importance for anyone who uses the Incoterms® rules to learn or re-learn them – even if you consider yourself an expert – in order to avoid costly mistakes in the future. “Learn now, ahead of time to avoid problems down the road.” she said.
It may come as shock to some – especially those that consider themselves experienced users of the rules – to learn they may actually be using them incorrectly.
O’Connor said that some users “wont fully know what it means when they put a three letter Incoterms® rule into their contract. They have a general idea, often, they may have a specific idea, but not quite nuanced enough or sometimes it may be just that their company has always done things that way.”
With the new rules set to come into force from 1st January 2020, shipping, logistics, supply chain and freight professionals need to refresh their knowledge now if they want to be able to use the Incoterms® 2020 confidently and without errors, come the new year.
Some of the changes in the Incoterms® 2020 rules include:
- Updates to the FCA rule regarding bills of lading
- Updates to the levels of insurance coverage required in CIF and CIP
- Renaming of the DAT rule to make it more fit for purpose
- Updates to security-related obligations in several articles of each Incoterms® rule
One of the biggest updates to this edition of the trade terms is a brand-new matrix comparison tool that makes it easier and faster than ever to find the right Incoterms® rule for your transaction – even if you are not an expert.
O’Connor said, “you can look at it horizontally or vertically, and quickly check yourself that you are choosing the right rule. That will be an extremely useful tool – people can focus on the issues that they really care about.”
She continued “One thing important in each rule is who pays for what. We’ve made that information easier to find, picked out all the little costs that arise in various articles in each rule and put them all in one place”.
The matrix tool is one of a number of changes and initiatives designed to make the rules more user friendly, and O’Connor believes that if there is to be a legacy of this edition of the Incoterms® rules, it is to help users avoid mistakes, especially those that are not experts or lawyers.
One of those initiatives designed to help users avoid mistakes is a new online training course – the Incoterms® 2020 Certificate – developed by the educational arm of the ICC, the ICC Academy. This course is the world’s only ICC-endorsed online training on the Incoterms® 2020 rules.
The course has been authored and reviewed by members of the ICC Incoterms® 2020 Drafting Group and is designed to give users of the rules, both experienced and inexperienced, a comprehensive and up-to-date understanding of the ICC’s premier international trading tool.
No other online training on the new rules can offer the same level of expertise.
The Incoterms® 2020 Certificate includes:
- 12 months access to four hours of learning over seven lessons, delivered exclusively online. You can repeat the lessons as many times as you want during the 12-month period.
- A digital version of the brand-new matrix comparison tool that makes it easier and faster than ever to find the right Incoterms® rule for your transaction – even if you’re not an expert.
- Interactive learning – 10 sample documents and 35 assessment questions to help you grasp key concepts easily and review the course material.
- One attempt at timed one-hour online exam – if you pass (70%) you will receive an ICC Academy, industry-recognised certificate signed by the ICC Secretary General.
- 24/7 access to the course – you can learn at your own pace.
If you want to ensure your business is using the Incoterms® rules correctly and avoid expensive mistakes, the Incoterms® 2020 Certificate is available now, in English or Spanish, for USD $399.
Alternatively, you can purchase the Incoterms® 2020 Certificate Bundle option for USD $429. This includes the online course as well as the official ICC Incoterms® 2020 digital publication.
The seven lessons of the online course cover:
- An overview of the latest changes to the rules so you can understand how to best incorporate these into sales contracts
- The obligations of buyer and seller in terms of costs and risks for each Incoterms® 2020 rule
- The fundamental commercial purpose for each rule – understand what each rule was designed for so you know how to best apply it
- How to choose the most appropriate rule for a particular transaction using the new matrix comparison tool
- Practical case studies to help you understand how to apply what you have learned to real world scenarios
- Assessment questions to help ensure you are on track to pass the final exam
You can learn more about the ICC Academy’s Incoterms® 2020 Certificate on the ICC Academy website and both the Incoterms® 2020 Certificate and the Incoterms® 2020 Certificate Bundle are available to purchase here.
And remember, it is not just first-time users of the rules that need to ensure they have a comprehensive understanding. Evidence gathered by the ICC during the latest drafting process suggested that many users of the rules, even experienced ones, are still choosing the wrong rule for their transaction and would benefit from further training.