Incoterms Training

Focus On: Incoterms® 2020 Rules

Engaging in global trade can expose companies to increased risks and costs, such as lost goods, unnecessary delays, and disputes. Clearly defining responsibilities within the supply chain can mitigate these issues, which is the purpose of the Incoterms® Rules that have been in place since 1936. However, Incoterms® are often misunderstood and misapplied. Ensure you are utilising them correctly by participating in our full-day interactive course.



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Payment Methods: Handling Letters of Credit

This essential training course is designed for all exporters and importers who work with Letters of Credit (LC). Through practical exercises, participants will learn to handle this payment method effectively while reviewing alternative payment terms. The course focuses on managing bank requirements and preparing accurate documentation on time, helping businesses avoid costly delays and errors.



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About Our Courses

Don't get caught out by using inappropriate Incoterms, especially now that the UK is no longer in the European Union. The consequences can be costly, not only in terms of unexpected duties and taxes, but also with the risk of loss or damage. This collection of courses takes you through the complicated area of cost and risk when goods cross borders.


Don't forget that Strong and Herd™ can also provide you with bespoke in-house training to suit your specific training needs. Simply contact us to discuss your complete requirements.

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FAQ's

  • Do all Incoterms have to show Incoterms (R) 2020 after them?

    When showing an Incoterms® rule in a contract or on a shipping invoice you must show the applicable year and it is recommended to show the registered trademark but the ICC seem to have softened their stance on this for companies so don’t worry if you can’t show the ® sign. The ® is aimed at companies like us who do training, prepare documents and write about the terms for the general public to make sure we let people know registered by the ICC.

  • One of our clients attended a recent Incoterms® 2020 Seminar and has got the impression they can only use the term FOB for conventional (break bulk) ocean cargo ie non containerized. As this will have a big impact on them, they have asked me to check it out with you because, basically, our client would prefer to continue to us the term FOB for containers.

    Incoterms® 2020 Rules is still following the usual rules that FOB, along with FAS, CFR and CIF are only appropriate for conventional sea freight. This isn’t new. The introduction to the new set of term says that “the FOB rule is not appropriate where goods are handed over to the carrier before they are on board the vessel.” This means that if the goods are handed over to a carrier at a container terminal, for loading into a container prior to that being loaded on a ship FOB is inappropriate and the FCA will be more appropriate… 

  • Does the new Incoterms ® 2020 rules make it clear whether a seller must pay import VAT if they sell DDP or is it still vague?

    Yes, under DDP the seller is responsible for all customs duties and taxes applicable to the goods on arrival into the country; if a customs authorities charges VAT at import then the seller has to pay it – unless the contract states specifically that the delivery term is “DDP named place of destination local taxes (VAT) excluded Incoterms® 2020”. The use of DDP as a delivery term has never been recommended and we are beginning to see some new problems for traders using this term. To sell correctly under DDP terms the seller must be able to be the importer of record in the destination country; to do this they must be registered as an importer with the customs authorities, be registered to pay local taxes and apply with the increased cargo security regulations. Where, in the past, many freight companies got around this in one way or another – sometimes incorrectly using the buyer’s registrations to get things cleared through customs, perhaps without the buyer knowing they were – the emphasis on security controls and customs liabilities is making this harder for them to do. 

  • What happens to orders which were entered on to our business system before 1st January 2020 that will have obsolete Incoterms® rules, (for example DAT)? Will Customs in the country of arrival automatically apply the corresponding replacement code from the 2020 Incoterms® set of rules or will they assume that we are still using the old terms? Is there a "honeymoon" period to allow time for orders showing old Incoterms to be shipped? If so, how long is it?

    Incoterms 2010 and DAT terms have not become obsolete from 1/1/2020. 1st January 2020 is the date the new set of International Commercial Terms (Incoterms® 2020 Rules) became effected. Contracts remain covered by Incoterms 2010 until the contracts have been formally amended to be covered by Incoterms 2020 – this happened with the 2000 set and earlier sets; in fact, old Incoterms® never die. If a company decides to continue using Incoterms 2010 indefinitely then they are still recognisable terms worldwide and though, in time, they will appear old fashioned (like the 1980 Incoterm FOT does) the definitions will remain in the legal statute books. Customs have nothing to do with the Incoterms® Rules – they must accept whichever term is used whether old or new. The Incoterms® contract terms are essentially the term agreed between the seller and buyer

  • A customer buys under FCA seller’s premises and arranges for a freight forwarder to drop off a sea freight container for loading. As the seller what are our responsibilities?

    Under FCA it is the seller’s responsibility to load the container. Once safely stowed get a signature from the driver declaring there is no damage, and this is the end of the seller’s risk. You do need to ensure an export customs declaration is completed in your name and obtain and permits or licences that allow the goods to leave the UK so there may be additional costs to consider.

  • We cannot find anything in Incoterms 2020 which indicates how and when we will be paid. Where is this information to be found?

    How and when you get paid has nothing to do with the Incoterms ® Rules, and never has. Within the introduction to the Incoterms® 2020 rules, Section II covers “What Incoterms® Rules do not do”. Point 7. 3rd bullet state that Incoterms® rule do not establish: “the time, place, method or currency of payment of the price”. The Incoterms ® Rules only define the point of legal delivery of the goods and when the risk of loss or damage passes from the seller to the buyer and costs related to these actions