Incoterms® 2020 and the missed opportunities for the next version

ABSTRACT

Incoterms® define obligations, risks and costs that each of the seller and buyer must incur in the movement of the goods for a trade. New versions are issued when deemed necessary by the International Chamber of Commerce (ICC) and are aimed at including new trade realities and fostering trade. A new version Incoterms® 2020 is now available to replace the previous version, namely Incoterms® 2010. The research using Construct Clarity theory shows there are issues with the Incoterms® 2020 both as to the holistic ability to cover all trade as well as in the individual Incoterms® themselves. These issues are analysed in detail and, based on this research, the authors synthesize these into the reasoned aspects the Incoterms® drafting committee missed to further improve the Incoterms® rules. The authors extend this research and present the improvements that could be achieved in a future issue of the Incoterms® rules.

KEYWORDS:

• Incoterms®
• logistics
• trade
• supply chain
• obligations
• risks and costs
• buyer-supplier relationship

Disclosure statement

No potential conflict of interest was reported by the author(s).