Workshop Review(3) — Incoterms® 2020 : The Change In International Trade
Nowadays, international trade among Nations happens frequently and the partnerships became closer than ever. Under those transactions, using International Commercial Terms as the standard is the common bonding point legally. Furthermore, The International Commercial Terms are accepted by governments, legal authorities worldwide for the interpretation of most regularly used terms in international trade. On the 10th of Sept,2019, the latest version, “Incoterms 2020”, has been edited and published. It took effect on 1st January 2020.
First of all, the six-hour class went to the business straight to discuss the differences between the latest version and genesis. In terms of business is to maximize profits for its owners. It would increase the score of the credit and minimize the budget simultaneously when you can properly use those terms. It is one step away whether your prudent strategy can increase the company’s value or another way around. Once you can pragmatically use those standards, the number of the contract will go to the roof.
Then, my world was shocked again by Trading Cost and Remittance. The price is the key to proceed with the contracts. You would know how to calculate the total cost when you have learned the formulation. So you may suggest the clients getting the sales off by ordering more quantity. But, Remittance is the hot potato here, paying is the action we do regularly, but being surprised by that including Demand Draft, Letter of Credit and so on. Also, you must consider the buyer’s credit to decide whether buying the insurance or not.
‘’It is easy to know the supposition, hard to assimilate it’’, is the best expression to describe the final part. I found my naiveness whilst reading real case studies. You must choose the right terms to prove that your call is suited in the real case scenarios and to tell who owns the expenditure. Proper use not only to minimize the unpredictable expense and the risk but also can avoid the mistakes. Every step we do circuits toward the budget, that is the purpose of the business.
The most caring for us are the revised parts. If we keep using them, we may under-declare the tariff. Once Customs Brokerage inspects, the company would be fined with the penalty or being on the record officially for the worst circumstances. International Commercial Terms is the bridge among those companies under international trading to make the whole transactions easier, but the unpredictable expenses may come to knock the door once you ignore the modification.
