‘Understanding of Incoterms helps limit risk'

“The survival of businesses depends increasingly on their ability to trade competitively on world markets – and as the ‘basic language’ of world trade, a knowledge and understanding of the Incoterms 2010 rules is a fundamental requirement for all parties engaged in this field,” said Mark Goodger, managing director of Global Maritime Learning Solutions (GMLS). He was speaking at the Smart Procurement World Conference in Johannesburg last week. “The new Incoterms 2010 Rules have been scaled down from 13 to 11 – including two new rules, DAT and DAP, which replace the Incoterms 2000 Rules: DAF, DES, DEQ & DDU – and basically, break down barriers to international trade by ensuring compliance and eliminating risk,” said Goodger. He reiterated that by understanding the new rules, companies would enhance their efficiencies and cost-effectiveness and avoid leaving themselves open to problems and disputes. The new rules go to the heart of trade security, with the onus on importers and exporters alike to ensure compliance in delivery. He added that it was particularly important to note that the term “delivery” was used in two different senses in the Incoterms 2010 rules. “Firstly, the term is used to determine when the seller has fulfilled his delivery obligation and it is also used in the context of the buyer’s obligation to accept delivery of the goods.”