Incoterms 2010 Ramberg Summary

A response paper to article INCOTERMS® 2010 by Jan Ramberg

A brief summary The article is articulated into six sub-parts. Part A is titled ‘Incoterms 1936 and Subsequent Revisions’ and is concerned primarily with the revision of Incoterms since 1936 to 2010 and affords reasons for the same. Part B- The Revision Methodology. Part C- The Presentation and Structure of Incoterms 2010- provides the way in which Incoterms 2010 have being structured as being presented in two groups: Group I dealing with terms for any mode of transport followed by Group II with rules for sea and inland waterway transport. Part D- The Introduction of DAT and DAP- discusses the newly introduced DAT and DAP by 2010 revision of Incoterms. Part E- Abolishing

‘Ship’s rail was an imaginary line extending perpendicularly from the ship’s rail into the stratosphere’. ‘The ship’s rail has been regarded as a border between the seller’s and the buyer’s land’. In earlier edition of Incoterms the risk transfer point under FOB, CFR and CIF was ship’s rail but this has now been replaced with simple rule that the risk passes when the goods are on board the vessel. The author in this part of the article argues that abolishing of the ship’s rail as a risk transfer point might not be the most radical change in Incoterms 2010. He further puts two questions- How should the expression “place on board” be interpreted? Does it include the stowing and trimming of the cargo on board? As per my understanding the main reason for abolishing ship’s rail as risk transfer point is that the traders used the term FOB incorrectly, instead of more appropriate FCA, when the goods were containerised. This misapplication could result in complications in situations where goods are damaged during loading. ‘The use of "FOB" originated in the days of sailing ships. When the ICC first wrote their guidelines for the use of the term in 1936, the ship's rail was still relevant, as goods were often passed over the rail by hand. In the modern era of containerization, the term "ship's rail" is somewhat archaic for trade purposes, as with a sealed shipping container there is no way of establishing when damage occurred after the container has been sealed’. Therefore, concept of ship’s rail was done away with and ICC further clarified that the term FOB should not be used for container goods carried on multimodal contract. The more appropriate Incoterm for container shipments is FCA. As per “place on board” delivery is now signified by placing of the goods on board and Incoterms 2010 do not deal with the parties obligation for stowage