IncoTerms 2020

Who is Ready for IncoTerms 2020! On a serious note, what are you doing to prepare if anything? I am no IncoTerms expert, is there something I should be doing to Reports or Records to be Ready?

I watched the Videos and Read the Articles… I am no wiser.

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Based on this short summary, I don’t think there is anything to do except add the codes (or disable others) in Epicor.

You are making me think I’m missing something… what are you thinking needs to be done?

From a Business POV I guess if we always simply did EXW and now have to use CNI, perhaps we need to talk to our Insurance Company to make sure it covers and agrees with what CNI claims is our responsibility vs Carriers etc…

Also probably make sure our Suppliers / Customers are aware of IncoTerms 2020… If we want to continue to use IncoTerms 2010, we can but everyone says it has to be explicitly mentioned “Based on IncoTerms 2010” on the report style, so there is no confusion. Perhaps modify some reports if we do want to use EXW etc…

Atleast us we use EXW/FCA

Incoterms ® 2020 - What do you need to know. … It is planned that FCA will be split into two more Incoterms . FOB and CIF should no longer be used for container shipping. New Incoterms are introduced such as CNI (Cost and Insurance), DTP (Delivered at Terminal Paid) and DPP (Delivered at Place Paid).

Difficulties in FCA and CFR/ CIF – A New CNI

The introduction of a new CNI (cost and insurance method) will help to resolve controversies and disputes surrounding duty payment as well as bridge the gap between FCA and CFR. This CNI will enable the seller/ exporter to take responsibility for the international insurance coverage, and the buyer will have to bear the risk of transportation The change is assumed to be the best solution since it can be compared with for FOB goods and CIF.

Ex Works – The Removal

By including the proposed CNI into the new Incoterms, it will make FCA more relevant in the industry and almost point out the shortfalls of Ex Works. This opinion was also expressed by the international School of Shipping here:

Many stakeholders are of the opinion that Ex Works should be removed from the set of Incoterms completely. This is because there are many aspects that are confusing. The removal advocates and reinforces it’s use and applicability to the domestic trade market, however, refuse to give Ex Works a place in the international one.

ok -didn’t think of the insurance company but I need to start asking ?'s here to see if any thought has been applied. Insurance is usually not an IT concern :slight_smile: so I wasn’t thinking of that. And I didn’t see that disclaimer regulation in the summary article. so we’ll have to decide on that.

Thanks for the additional insight. I’ll go back and explore this some more and make sure my folks are thinking about it.

We updated our FOB details in Epicor and then changed the report to state “Incoterms 2010” for the label instead of the standard FOB call out. We will probably add and remove/inactivate as needed and then potentially update the label to 2020.

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I started to wonder from an IT perspective first :slight_smile: besides potentially having to modify some report styles… Then I thought well from a Business POV, what if the Insurance Premiums go up, if you relied on EXW :smiley: maybe need to go insurance shopping.

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@jeowings ok thats what I was wondering, if I understood that correctly that you can use older versions but must explicitly just define the IncoTerms Year (Standard your basing your Term on).

LOL!! I fired off a ‘hey, what’s up with IncoTerms2020?’ email to sales, shipping, and CFO (regarding insurance) and I’ve created a maelstrom of emails… Should’ve waiting for Friday at 3pm!!!

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Did they forget :smiley: or they never heard of the rule… Like in some case, people just don’t know, not looped in the industry enough.

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I would like Epicor to rename FOB to IncoTerms; I would like an indicator on the IncoTerm table that indicates when possession changes hands; this might create the need of a ShippedNotTransfered flag to prevent invoicing until proof of delivery at the transfer point; which would required a command to clear that flag and a report to indicate what is “in-transit” and maybe some GL Control accounts to track the value; tie this into Intercompany trading and Revenue Recognition.

Asking too much? Maybe should put that in the Enhancement Category?

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I was wondering the same thing, how does one manage IncoTerms based on ShipTo or based on OTS or Customer + ShipTo Destination… or Carrier… I guess you could deliver goods from New York to Florida via Truck, but you can also do so via Boat - you might want to apply diff Terms in that case.

Also when you sell a Helicopter you might want diff IncoTerms than when you sell a Service Part for Helicopter :smiley: Basically – more flexibility by Part Class too, or is that not how the industry works (I am no incoterms expert)

I agree Mark. We have actually changed the functionality of our FOB table to hold the INCO terms and have replaced the FOB text on every program with “Freight Terms”. In addition we use a UD Codes field to note who is responsible for “Freight Cost”. No ties to GL however.
All of our shipping experts took exception to the current Epicor design/notation of FOB.

Nancy

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I’ll agree with @Mark_Wonsil too. I see no reason to have an FOB field when a single incoterms field would suffice. The only thing I can think of is the FOB field really is there to contain the subset of FOB designations we ten to use domestically to indicate the transfer of ownership as well. Like the last company I was with used two codes (primarily) called ‘FOB-Destination’ and ‘FOB-Mill’ indicating that the customer was ‘taking ownership’ at either their location or our mfg site. Even if that is the case, a single Incoterms field could contain those (and any other) variation of existing ICC codes to include change of ownership suffixes.

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@MikeGross let us know when you guys find out more info, if anyone does more research, i’ll do the same (IF). From the Business Perspective, if any Exec mentions that there has to be some change to a process.

Sounds like a plan. I wonder if @MikeGross made any changes yet :slight_smile:

LOL! Not Yet. My folks are getting used to the idea that I’m going to convert all the remaining CR to SSRS and that they just will not look the same (and will include this change). You’ve got to give these folks a few months to think ti was their own idea…

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