The Incoterms rules or International Commercial Terms defines obligations of seller and buyer and are intended to reduce or remove altogether uncertainties of rules. The first edition of Incoterms was published in 1936; and later editions are occasionally updated and internationally referred to. The current edition is Incoterms 2010. At this point of time, Thailand chapter of International Chamber of Commerce (ICC) is assessing whether Incoterms 2010 still apply to changes in current commercial environment.  In this regard, a meeting of focus group aiming at discussing the preparation of Incoterms 2020 was held on 11 January 2017 at the Office of ICC (Thailand), Bangkok. Among attendees were representatives of Sri Trang Agro - Industry Public Company Limited, a representative of Thai latex Association and Ms. Piyaporn Saelim, Manager of the Thai Rubber Association.

The meeting discussed different issues and came up with the following proposals:

1) Obligation for cargo security charge shall be clearly indicated. It was proposed that the charge should be borne by party requesting. Pre-delivery charge and post-delivery charge shall be on seller’s account and buyer’s account respectively. The rest shall apply to Incoterms.

2) Verified Gross Mass is the total weight of a packed container and different from the ‘cargo weight’ which means cargo weight only. Discrepancy between the declared and actual packed container weight has been a risk against transportation safety. “Shipper” shall not be indicated in Incoterms as “shipper” in Bill of Lading (B/L) is uncertain. Therefore, seller must inform correct weight.

3) Container

3.1) FCA shall be used instead of FOB Term when shipping in container as the former is more suitable in terms of both THC and damage responsibility. However, buyer may not accept FCA Term as buyer has more obligation and risk.

3.2) CPT Term shall be used instead of CFR Term and CIF Term when shipping in container.

4) FAS Term shall be retained as it is still used in conventional shipment.

5) Incoterms 2010 comprehends commodities.

6) EXW/DPP shall be retained and not separated.

7) Incoterms 2010 comprehends insurance, except for CIP (Air Transportation)

8) The Thai Rubber Association proposed the indication that obligation for THC shall be on buyer’s account. This issue is also faced by other trade associations. Modern trade practice depends on negotiation power between buyer and seller. However, ICC (Thailand) informed the meeting that Incoterms are general commercial terms; therefore not to be specifically indicated. All views and opinions across the world will be compiled and sent to the headquarters International Chamber of Commerce during February – March 2017. The outcome of Incoterms 2020 Draft Committee Meeting will be updated in due course.

The Thai Rubber Association realizes the paramount importance of improving the current Incoterms to be more precise, updated, comprehensive to the current commercial environment and mutually accepted by buyer and seller. We wish that all sectors concerned follow the Incoterms practice and contribute to the improvements of Incoterms for the benefits of Thai rubber industry as a whole.