Shipping industry gets INCOTERMS update

Stakeholders in the shipping industry were last week updated on the latest International Commercial Terms (INCOTERMS) governing trade.

The shipping interests were updated during the Seaboard Jamaica-sponsored Lunch and Learn Seminar, held at the Shipping Association of Jamaica's training facility.

The presentation, made by Fritz Pinnock, executive director of Caribbean Maritime Institute (CMI), sought to update traders of the new rules which became effective in 2011.

INCOTERMS, Pinnock said, are internally accepted commercial terms defining the respective roles and responsibilities (including costs) of the buyer and seller in the arrangement of transportation and other obligations.

The changes which became effective this year, he said, pertains to two groups of INCOTERMS rules: any mode of transport, and sea and inland waterway transport.

Pinnock pointed out that some of the changes include the following:

• Guidance notes - explains fundamentals, usage, risk, costs, etc.
• Electronic communication - now given the same effect as paper as long as parties agree or where customary.
• Security-related clearances - the rules now allocate responsibility for these.
• String Sales - rules now recognise that seller may fulfil its obligations by procuring goods that have been shipped.
• Terminal handling charges - now specifically allocated so the buyer is not charged twice (sellet and terminal).

Pinnock pointed out that existing contracts (even if performance continues into 2011) should continue to apply the 2000 edition of INCOTERMS. However, contracts entered into before January 2011 should specify which version will apply. For contracts entered into beginning January 2011, the 2010 rules will apply.

Other changes have been made to the classification of INCOTERMS which are grouped into two classes - terms for any mode of transport and marine-only terms.

Clarify modifications

The changes for any mode of transport pertains to ex-works, free carrier, carriage paid to, carriage insurance paid to, delivered at place and delivered duty paid. For marine-only terms (sea and inland waterway transport), changes have been made to free alongside ship, free on board, cost and freight and cost insurance and freight.

Pinnock warns of modifying INCOTERMS rules. However, if modifications are made, he advises that contracts clarify what the modifications are.

Seaboard Jamaica, the Jamaican arm of Seaboard Marine, was incorporated in October 1999 to offer the Jamaican market a more personalised service.

Seaboard has twice-weekly service from Miami to Jamaica and weekly from Fernandina Beach and Brooklyn/New Jersey. Weekly Caribbean routes include Antigua, Barbados, Trinidad, St Maarten, Haiti, Dominican Republic, Suriname, Guyana and Grand Cayman.

Other routes include weekly to Mexico, Panama, Colombia, Dominican Republic and Belize, while there is a fortnightly service to Houston and New Orleans.

Seaboard also facilitates less-than-container load exports from Kingston worldwide via Miami.