The 2010 edition of the internationally-recognised Incoterms rules are available for use from 1 January 2011.

Published by the International Chamber of Commerce, the Incoterms rules allow buyers and sellers to transact business with the certainty that each understands its obligations in relation to:

	(a)		the point at which the risk of loss of or damage to the goods passes from the seller to the buyer, and
	(b)		which party bears various costs associated with the shipment.

The risk transfer point (a), also called the delivery point, is important in relation to marine cargo insurance underwriting and claims, because it is a factor in establishing insurable interest. (Another factor is title; but the Incoterms rules do not deal with payment or the passing of title.)

The main changes from the 2000 rules are:

Less Focus on the Port-to-Port Delivery Terms
To reduce the misuse by sellers of the FOB, CFR and CIF delivery terms, which are generally not appropriate for containerised, multi-modal and non-maritime shipments, the delivery terms are now separated into two distinct groups:

Terms for any method of carriage, including maritime shipments
EXW		Ex works
FCA		Free carrier
CPT		Carriage paid to
CIP		Carriage and insurance paid to
DAT		Delivered at terminal
DAP		Delivered at place
DDP		Delivered duty paid

Terms applicable to port-to-port shipments only
FAS		Free alongside
FOB		Free on board
CFR		Cost and freight
CIF		Cost, insurance and freight

Fewer Delivery Terms
To streamline the delivery terms, and to better cater for the practicalities of multi-modal traffic, the total number of delivery terms reduces from thirteen to eleven: a new term, DAP, replaces DAF, DDU and DES, while DAT replaces DEQ, making an “unloaded” term available for non-maritime shipments for the first time.

Demise of the Ship’s Rail
Where the FOB, CFR or CIF delivery terms are used, the rules now specify that risk passes from the seller to the buyer when the goods are “on board”. This replaces previous reference to goods “passing the ship’s rail”, which is not appropriate for many methods of loading.