Sustaining Contractual Business: an Exploration of the New Revised International Commercial Terms: Incoterms®2010

By K.B. Chikwava

Incoterms are critical to the process when concluding any contract that involves buying and selling across international borders.
Brian Chikwavas handbook, Sustaining Contractual Business: An Exploration of the New Revised International Commercial Terms - Incoterms2010, is a practical guide to understanding the use of the latest Incoterms for any of the following who are involved with contracts involving inter-country trade in goods:
Contract negotiators or traders
Execution operatives in export organisations
Logistics operatives in transport, shipping and freight forwarding companies
Trade finance officers
Export/import consultants and advisors
Finance and risk professionals
Inhouse cargo insurance specialists
Lawyers advising any of the above and international bankers

• Language: English
• Publisher: Xlibris UK
• Release date: Apr 26, 2012
• ISBN: 9781477100745

K.B. Chikwava

Brian K Chikwava is an International Trade and Logistics Professional with extensive experience in International Trade, Freight Forwarding, Logistics and Supply Chain Management. He is a Senior Logistics Advisor to the South African parastatal and utility company, in its Supply Chain Operations Division within Group Commercial. He has held senior positions at Combine Cargo and Allen Wack and Shepherd Freight in Zimbabwe and has worked for United Airlines and the logistics company, Transoceanic (now Agility) in the United Kingdom. While working for Transoceanic as a project coordinator, from his London base he successfully synchronised the logistics of the construction of one of the major petro-chemical plants in Damman, Saudi Arabia (the ‘SHARQ Project,) He is accredited by the International Chamber of Commerce (ICC) in Paris as a Master Class Incoterms® 2010 Trainer. He is also a certified facilitator; having trained thousands of people in South Africa, including He has also conducted workshops at the University of Johannesburg and school of Shipping across the country. He is a qualified and certified European Master Logistician (EMLog) and is also affiliated to the Chartered Institute of Purchasing and Supply (CIPS) and the Institute of Commercial Management (ICM).

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Copyright © 2012 by K.B. Chikwava.

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Contents

About the author . . .

Introduction

Historical background to Incoterms

Why were they developed?

Who should use Incoterms?

Common misconceptions about Incoterms

Incoterms: rules for any mode or modes of transport

Four groups of Incoterms

The classification of the 11 new Incoterms rules

Incoterms® 2010 and what they mean

Incoterms and the transfer of risk

Incoterms: checklist of who pays for what

When is delivery to the carrier completed for all modes of transport?

Factors influencing the choice of Incoterms in contracts

What you need to know and understand about the new features of Incoterms 2010

Some words used in Incoterms and their real meaning

Goods and services and Incoterms

Principal errors made by importers and/or exporters in the use of Incoterms in contracts

Establishing the appropriate Dispute Boards (DBs) when negotiating business contracts

Conclusions and recommendations

Questions about case studies of Incoterms

Answers to case study questions

References and further reading

Acronyms (other than Incoterms)

Acknowledgements:

Endnotes

About the author . . .

Brian K Chikwava is an International Trade and Logistics Professional with extensive experience in International Trade, Freight Forwarding, Logistics and Supply Chain Management. He is a Senior Logistics Advisor to the South African parastatal and utility company, in its Supply Chain Operations Division within Group Commercial.

He has held senior positions at Combine Cargo and Allen Wack and Shepherd Freight in Zimbabwe and has worked for United Airlines and the logistics company, Transoceanic (now Agility) in the United Kingdom. While working for Transoceanic as a project coordinator, from his London base he successfully synchronised the logistics of the construction of one of the major petro-chemical plants in Damman, Saudi Arabia (the ‘SHARQ Project,)

He is accredited by the International Chamber of Commerce (ICC) in Paris as a Master Class Incoterms® 2010[1] Trainer. He is also a certified facilitator; having trained thousands of people in South Africa, He has also conducted workshops at the University of Johannesburg and school of Shipping across the country. He is a qualified and certified European Master Logistician (EMLog) and is also affiliated to the Chartered Institute of Purchasing and Supply (CIPS) and the Institute of Commercial Management (ICM).

. . . and how to use the book

This book summarises the topics, concepts and issues pertaining to the use of Incoterms in contracts. It also provides guidelines for the course material, why it is important and how to apply theories and concepts. While—as a supplementary text to facilitate learning—it is not intended to replace textbooks or lectures, it should be read in parallel with the ICC Incoterms® 2010 handbook, where each topic is covered in detail. It should be seen as a framework in which to organise the subject-matter and to extract crucial points from the textbook and other learning material.

Note that the views expressed in this handbook are intended as general interpretative guidance only and not as authoritative opinion.

Introduction

The International Commercial Terms, popularly known as ‘Incoterms,’ were formulated in 1936 in order to facilitate global trade by providing clear definitions of each party’s obligations in a contract of sale, thereby reducing the potential for legal complications. According to Emmanuel Jolive, General Counsel of the International Court of Arbitration:

‘The Incoterms are a perfect example of an efficient standardization of an international business tool.’

Their day-to-day use in international sales contracts brings legal certainty to business transactions, while at the same time simplifying the drafting of international contracts.

They are primarily relevant to companies involved in buying and selling goods internationally as their normal business. It is important to note that Incoterms are not applicable when dealing with services—a common misconception among most international trade practitioners. However, a debate has arisen about whether Incoterms should be used when either importing or exporting electricity to