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(Free alongside Ship), FOB (Free on Board), C&F (Cost and order to comply with the same, the "License, Authorisations
Freight), CIF (Cost, Insurance and Freight), Ex Ship and Ex and Formalities" section of FAS and DEQ were modified.
Quay. This served as a global guideline to international trade
and the beginning to Incoterms. The Incoterms® 2010 version brought about consolidation
in the D-family of rules by deleting the rules of DAF, DES,
The Second World War delayed the revision of INCOTERMS®
DEQ and DDU (Delivered Duty Unpaid). It also permitted
rules and the same was issued in 1953. It included three new adding of new rules DAT (Delivered at Terminal) and DAP
trade terms useful for non-maritime transport. The new rules
(Delivered at Place).
included were DCP (Delivery Costs Paid), FOR (Free on Rail)
and FOT (Free on Truck). The second revision in Incoterms
The most recent and the latest revision by ICC in this line is
rules were published by ICC in 1967 which aimed at resolving the "Incoterms® 2020" which came into effect from 1st
the misinterpretations of the previous version. Two more
January 2020. This consists of 11 distinct rules which can be
trade terms: DAF (Delivery at Frontier) and DDP (Delivery
used based on the mode of transport.
at destination) were introduced in the third revision.
The advancements in air
travel which led to
movement of goods
through air necessitated
the next revision and the
fourth version of the
Incoterms® was
published in 1974. This
version saw the
introduction of a new
term FOB Airport (Free
on Board Airport).

The sudden spurt in
containerized freight
traffic and adoption of
new documentation Fig 1: History of Incoterms® Rules
processes created the need for the next revision. The Fifth
edition of Incoterms® published in 1980 saw the introduction Clearly, the Incoterms® rules have been regularly updated
of a new trade term FRC (Free Carrier…Named at Point), by the ICC keeping in pace with the developments taking
which allowed the goods to be delivered at a reception point place in the international trade.
on the shore like the container yard.
Importance of Incoterms®:
In 1990 the ICC came up with a complete revision of the 1. Reduce Risk:
Incoterms® rules which simplified the Free Carrier term by
dropping the rules for specific modes of transport such as The use of INCOTERMS® in an international trade contract
reduces and / or removes the inconsistencies in language
FOR, FOT and FOB Airport and instead introduced a new
by providing all parties involved the uniform definition of
general term FCA (Free Carrier…at Named Point) to replace
them. specific terms within a trade agreement. This helps in
elimination of the risk of problems arising during shipment
The Subsequent revision of 2000 was introduced taking into since all parties clearly understand their responsibilities in
account the amended customs clearance obligations. In performing the trade under the given contract.

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