With the continuous development of global trade, international trade terms are also constantly being updated and improved. The 2000 edition of the International Trade Terms (Incoterms 2000) has provided important guidance for global trade in the past decade. However, with the changes in the trade environment, the International Chamber of Commerce issued a new International Trade Terms (Incoterms 2010) in 2010 to adapt to new trade needs.

This article will explore in detail the main differences between the 2000 and 2010 versions of the International Trade Terms.

What is the international freight terms

International Freight Incroterms: Incoterms – a.k.a. Trade Terms are key elements of international contracts of sale. They tell the parties what to do with respect to carriage of the goods from buyer to seller, and export & import clearance. They also explain the division of costs and risks between the parties.

The difference between the 2000 and the 2010 version  is the number of Incoterms has been reduced from 13 to 11. Four Incoterms  (DAF, DES, DEQ, DDU) have been replaced by two new Incoterms  (DAT , DAP). The replaced Incoterms DAF, DES and DEQ were not used much in day to day trading.

Learn more: Freight Forwarders 13 Basic Terms of Trade

Adjustment of the classification of terms

In Incoterms 2000, trade terms were divided into four groups, EFCD, each reflecting the degree of responsibility of the seller to the buyer. However, in Incoterms 2010, the classification of terms was adjusted, simplifying the original four groups of terms into two categories: terms applicable to various modes of transport and water transport terms. This adjustment makes the use of terms more flexible and adapts to the needs of different modes of transport.

Changes in the number of trade terms

Incoterms 2000 contained a total of 13 trade terms, while in Incoterms 2010, the number of trade terms was reduced to 11. This change was mainly due to the merger and deletion of some terms, as well as the introduction of new terms.

Deleted terms

In Incoterms 2010, four D-group trade terms in Incoterms 2000 were deleted, namely DDU (Delivered Duty Unpaid), DAF (Delivered at Frontier), DES (Delivered on Board at Destination) and DEQ (Delivered at Destination Terminal). The deletion of these four terms reflects the changes in the international trade environment and the need for simpler and clearer terms.

Learn more: The Difference Between DDP, DDU And DAP Trade Terms

New terms

In order to fill the gaps left by the deletion of terms, two new D-group trade terms were added to Incoterms 2010, namely DAT (delivery at transport terminal) and DAP (delivery at named place). The introduction of these two new terms makes the terms more in line with the needs of modern trade, especially in multimodal transport and door-to-door transport.

Flexibility in the use of terms

Incoterms 2010 is more flexible in the use of terms, allowing parties to choose appropriate terms in trade contracts according to specific circumstances. This change makes trade contracts more in line with the actual needs of the parties and improves the efficiency and security of trade.

At Basenton Logistics we support both the Incoterms 2000 as the newly introduced Incoterms 2010. Please see below an overview of Incoterms and their version.

EXW – ExWorks (2000 and 2010)

This term represents the seller’s minimum obligation, since he only has to place the goods at the disposal of the buyer. The buyer must carry out all tasks of export & import clearance. Carriage & insurance is to be arranged by the buyer.

FCA – Free Carrier (2000 and 2010)

This term means that the seller delivers the goods, cleared for export, to the carrier nominated by the buyer at the named place. Seller pays for carriage to the named place.

What Is The Difference Between FCA And FOB

FAS – Free Alongside Ship (2000 and 2010)

International Freight Incroterms means that the seller delivers when the goods are placed alongside the vessel at the named port of shipment. The seller is required to clear the goods for export. The buyer has to bear all costs & risks of loss or damage to the goods from that moment. This term can be used for sea transport only.

FOB – Free On Board (2000 and 2010)

This term means that the seller delivers when the goods pass the ship’s rail at the named port of shipment. This means the buyer has to bear all costs & risks to the goods from that point. The seller must clear the goods for export. This term can only be used for sea transport. If the parties do not intend to deliver the goods across the ship’s rail, the FCA term should be used.

CFR – Cost and Freight (2000 and 2010)

This term means the seller delivers when the goods pass the ship’s rail in the port of shipment. Seller must pay the costs & freight necessary to bring the goods to the named port of destination, BUT the risk of loss or damage, as well as any additional costs due to events occurring after the time of delivery are transferred from seller to buyer. Seller must clear goods for export. This term can only be used for sea transport.

CIF – Cost, Insurance, Freight (2000 and 2010)

The seller delivers when the goods pass the ship’s rail in the port of shipment. Seller must pay the cost & freight necessary to bring goods to named port of destination. Risk of loss & damage same as CFR. Seller also has to procure marine insurance against buyer’s risk of loss/damage during the carriage. Seller must clear the goods for export. This term can only be used for sea transport.

The International Freight Incroterms Glossary

In 2020, The International Chamber of Commerce (ICC) updated their world-renowned Incoterms to help businesses like yours manage global trade. They act as a set of rules that clearly outline the responsibilities of both the seller and the buyer when it comes to the transportation of goods.

Bookmark this page so you’ve always got access to your handy glossary of Incoterms and so that you always know where your responsibility lies when shipping goods overseas.

Here is exactly what each of the abbreviations stands for, as well as a handy description.

The Glossary of Incoterms for Air Freight, Sea Freight and Land Freight

This is the only glossary you need to get to terms with the 11 Incoterms outlined by the ICC. Each term is used in freight forwarding and defines the role of both the seller and the buyer when it comes to the transportation of goods.

Understanding what they mean can help you identify things like:

1. Who is responsible for the risk of loss

2. Who is responsible for the risk of damage

3. Who will cover the cost of duties, custom fees and taxes

4. Who is responsible for procuring insurance

5. As well as many other useful points.

By bookmarking this page, you not only have access to our handy glossary of Incoterms for air freight, sea freight and land freight… you also have something to refer back to if anything does go wrong during the transportation of goods.

Basenton Logistics have over 8 years of experience dealing with export packing, freight and logistics management. Our dedicated account managers are always on hand to discuss your needs. Our team are on hand to assist you with export documentation and tell you exactly what the air freight International Freight Incroterms mean.