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Update from China: Disruption at airports

The current lockdown situation in Shanghai is now leading to further and serious disruptions of airfreight supply chains to and from (North-) China. 

DACHSER has been notified by major airlines, including but not limited to Chinese carriers such as China Southern Airlines (CZ), China Cargo Airlines (CK), China Eastern Airlines (MU), that with immediate effect all their flights (in- and outbound) to Shanghai (PVG) and to Zhengzhou (CGO) will be suspended until further notice. The impact on capacity on these very important trade lanes is vast and significant and is starting to send ripples to other airports in Asia. 

Due to the increased COVID-19 measures that have been taken by authorities in the greater Shanghai area, the operational handling at Shanghai Pudong Airport is severely affected. Shipments that have arrived at the airport are not being handled due to limited capacities and are facing heavy delays. Most airlines have therefore decided not to fly additional cargo into Shanghai and Zhengzhou which is an important airfreight hub for China.

This development has resulted in an increased usage of alternative airports (such as Beijing, Chengdu, Qingdao and Nanjing but also airports in South China) in combination with road feeder services to connect to such alternative airports. Many of the alternative airports are now reaching or already exceeding their capacity limits as well.

As of now we do not know how long this situation will persist and it is not foreseeable when airlines will resume to regular services between North China and Europe. All major economic centres in North China are increasingly affected with important industrial cities such as Ningbo, Suzhou, Beijing, Tianjin, Shanghai, Dalian, Jinan, Wuhan, Qingdao, Shenyang and Changchun.

The teams of DACHSER will monitor the development of the situation very closely and do their best to make the supply chains as seamless as possible. Local representatives at DACHSER will be happy to provide information about shipments and possible alternatives.

DACHSER worldwide
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Contact Elizabeth Gonzalez
elizabeth.gonzalez@dachser.com

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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.

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