Delegation from Germany visits DACHSER Minneapolis

"Preserving the good, increasing agility"

Burkhard Eling has been at the helm of family-owned DACHSER as CEO since January 1. He also marks the start of the next generation on the Executive Board. Burkhard Eling on a strong team and upcoming challenges.

Incoterms 2020

A new version of the Incoterms will take effect on January 1, 2020, and will include a number of changes. The terms of delivery issued by the International Chamber of Commerce regulate essential buyer and seller obligations in international trade, such as transfer of goods to the buyer, transport costs, liability for loss of and damage to goods, and insurance costs.

With the adaptation of the Incoterms 2020 to current global trading practices, the new version is very up-to-date and practice oriented. The aim of the revision was to make the Incoterms clauses more user-friendly. For example, their presentation has been revised to make it easier for users to select the appropriate clause. In addition, the order of the clauses has been changed, and revised user instructions have been added to each clause.

In terms of contents, significant changes have been made to the Intercoms 2010, in particular the following:

• Different coverage levels in CIF and CIP: As in the past, the seller is still obliged in the Incoterms 2020 to take out transport insurance at their own expense in clauses CIF (Cost Insurance Freight) and CIP (Carriage Insurance Paid). In contrast to the Incoterms 2010, however, the two clauses now provide for different minimum coverages. The minimum coverage to be observed when the CIF clause has been agreed remains unchanged. The transport insurance to be taken out by the seller must continue to at least correspond to the coverage in accordance with the (C) clauses of the Institute Cargo Clauses or similar clauses (insurance of named risks). If the CIP clause is agreed, the seller must now provide insurance coverage in accordance with the (A) clauses of the Institute Cargo Clauses (all-risk coverage). Both the CIF clause and the CIP clause allow the parties to the contract to agree on insurance coverage that differs from this.
• Inclusion of security-related requirements: Security-related requirements for the transport of goods have now been included in Rules A 4 and A 7 of each Incoterms 2020 clause. As with other the Incoterms clauses, it should be noted that the Incoterms clauses only directly apply to the parties to the sales contract and are not the subject of the contract of carriage.
• The Incoterms 2020 contain regulations for transporting with one’s own means of transport in FCA, Delivery at Place (DAP), Delivery at Place Unloaded (DPU), and Delivered Duty Paid (DDP).
• For goods sold under the FCA (Free Carrier) clause and intended for sea transport (such as goods in containers), FCA is stipulating a new option in the future. The buyer and seller may agree that the buyer shall instruct its freight carrier to issue an on-board bill of lading to the seller after the goods have been loaded. At the same time, the seller is obliged to hand over this on-board bill of lading to the buyer. This is typically done through participating banks.
• Renaming of DAT to DPU (Delivered at Place Unloaded). According to the Incoterms 2010 DAT clause, the seller delivered the goods as soon as they were unloaded from the means of transport at a “terminal.” However, according to the Incoterms 2010 application notes, the term “terminal” was not to be understood from a technical point of view but meant any unloading location. This fact was taken into account in the Incoterms 2020 by renaming the previous DAT clause to DPU (Delivered at Place Unloaded) for the sake of clarity. That means that in the future, any (agreed) place can be the place of destination.

The Incoterms apply between the parties of a (national or international) sales contract and address – but are not limited to – special rights and obligations within this contractual relationship. On the basis of a uniform definition guaranteed in this way, subsequent problems of interpretation or discrepancies between the parties to the sales contract are to be avoided. It should be noted that the Incoterms, due to their character as GT&C-like provisions, do not constitute statutory provisions and thus only become legally binding if they have been effectively agreed between the parties to the sales contract by means of a corresponding reference (for the Incoterms 2020, this is also possible before 1/1/2020). Irrespective of this, in individual cases conflicting statutory provisions still take precedence over an Incoterm clause.

The Incoterms were revised by 500 experts from more than 40 countries.The clauses are recognized worldwide and are in use in more than 30 different languages.

Chinese New Year: Impact on logistics

In 2021, Chinese New Year falls on February 12, it is the biggest festival in China where people celebrate the beginning of a new year with their families. The week-long national public holiday has consequences on global supply chains.

The following information provides an overview of some key facts of the festival and its possible impacts on logistics.

Dates and key facts

• February 12, 2021 marks the start of the Chinese New Year (the year of Ox).
• Chinese national holiday begins on February 11 and ends on February 17, meaning that most of the businesses, including DACHSER branches in China, will be closed and resumes on February 18.
• Factories and manufacturing sites used to be closed for a longer period of time. Production might pause already one week before Chinese New Year, some factories will only resume one month after.
• The long holiday allows workers in the city to travel back to their hometown for a family reunion, though it might not be the case this year due to the pandemic.

Impact on supply chain

• Extensive holidays in China can lead to delays to your shipments for up to one month.
• Due to the abovementioned closing period of manufacturing industries, there will be no productions from China for at least a week. Even though factories will be restarting gradually, operations will not resume to full swing immediately.
• Productions from other countries in Asia will also be impacted as some parts might come from China or the assembling processes are done there.
• Most shippers will stock up inventories that are sufficient to cover the Chinese New Year period, this leads to a pre-holiday cargo rush; it will also take some time after the festival to normalize the market conditions.

Get prepared

To avoid unnecessary price hikes and delays, it is strongly recommended to place bookings well in advance. At DACHSER, our logistics experts can help you to plan together. Feel free to discuss with us about your needs and we can work out the best to maintain your supply chain uninterrupted throughout the Chinese New Year.