Part two contents(4课时)
Questions:
What are Incoterms 2020?
What are Modes of Transport?
Report Incoterms (International Commercial Terms) are universally recognised rules that guide buyers and sellers to fulfil a contract for the shipment of goods.
The International Chamber of Commerce (ICC) introduced the new rules in effect from 1 January 2020.
A careful study of INCOTERMS 2020 will repay the effort by enabling more favourable trade terms for effective trade finance.
What are the Most Important Changes in InCoTerms 2020?
Incoterms 2020 formally defines the delivery point in the transaction where ‘the risk of loss or damage to the goods passes from the seller to the buyer’. In contrast, previously, the term had a more informal explanation.
Knowing the point of risk transfer eases the transaction for different trade finance parties. Incoterms 2020 rules make security more prevalent by listing import and export requirements. Also, they help in distinguishing whether the buyer or seller is responsible for meeting each of those requirements.
The updated definitions split the incoterms into 2 groups, each relevant to a specific mode of transport.
The most significant change relates to the term FCA (Free Carrier). It now allows the buyer to instruct the carrier to issue a Bill of Lading with an onboard notation to the seller. By doing so, it satisfies the terms and conditions of a Letter of Credit.
Previously, many exporters preferred to use FOB (Free on Board) to arrange payment under a Letter of Credit. Nonetheless, FCA was more suitable for the shipment of containerised goods. It was due to the extra delivery cost differential between FCA and FOB.
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