The Frontier) and DDP (Delivery at destination) to

The development or introduction of term Incoterms introduced by ICC in early 1920’s.

Group of industrialists, financiers and traders developed the trade standards to do business globally that would become known as the Incoterms.The ICC (International Chamber of commerce) was created in 1919. The ICC saw the opportunity/need to create global system of rules for trading. In 1920, ICC conducted study for understanding of trade terms to help buyers and sellers in international trade. This study introduce 6 common trades’ terms in only 13 countries and then published the study results in 1923. After first publish, in 1928, as second initial survey and improvement was done, more than 30 countries were expanded in the clarification of trade rules.

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After examine the finding and tested in 30 countries, finally the first version of the Incoterms was published in 1936. The six trade terms that were tested and examine in 1920 and 1928 includes FAS (Free alongside Ship), FOB (Free on Board), C&F (Carriage and Freight), Ex Ship and Ex Quay. The first version of Incoterms was issued in 1953.

After trade increased in rail mode, the three new Incoterms of non-marine transport were examined and created. DCP (Delivered Costs Paid), FOR (Free on Rail) and FOT (Free on Truck) were added. As trade increased, two more trade rules were introduced DAF (Delivery at Frontier) and DDP (Delivery at destination) to overcomes delivery issues in international trade. In 1974, due to raising trade in air transportation there was need to introduce Incoterms in air mode to solve trading issues. Thus 1974 ICC introduced new term of trade “FOB Airport” was introduced especially for air transport.

In 1980, ICC introduced FRC (Free Carrier) for rise of container traffic. In late 1980’s ICC decided to completely revised all Incoterms that have been introduced in order to take on them to modern-day commercial practice. In 1990 new version were published in which transportation modes like FOR, FOT and FOB Airport were eliminated and introduce FCA (Free Carrier). In 1990 version, there 13 individual Incoterms. In 2000, ICC did modification in Incoterms and amended some customs clearance obligations in order to resolve issues in import and export during international trade.2010 Incoterms edition is the current and final version of trade terms that companies are using now and it address almost all the issues of international trade. 2010 Incoterms edition merged D-family of rules by removing DAF, DES (Delivered Ex Ship), DEQ (Delivered Ex Quay) and DDU (Delivered Duty Paid) and added two new Incoterms: DAT (Delivered at Terminal) and DAP (Delivered at Place), reflections on the modern trade landscape. Incoterms 2010 came into effect in 2011.

Currently companies using 11 Incoterms for trade internationally and also domestics. – EXW, FCA, CPT, CIP, DAT, DAP and DDP, FAS, FOB, CFR and CIF. (Incoterm Rules History, 2018)


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