Global Supply Chain Managers Continue to Leverage Trade Compliance Complexity

Most countries impose legal control on the export of goods from their jurisdictions, while international trade agreements often include additional regulations. Failing to observe new laws and sanctions can have severe consequences for importers, too.

Irrespective of international trade agreements, supply chain mangers should remain ever vigilant, say regulatory compliance experts.

This includes understanding the changing landscape of Incoterms, which is a set of rules defining the responsibilities of sellers and buyers as determined by the International Chamber of Commerce (ICC).

In a recent dispatch from DSV, supply chain managers were told to be prepared for key changes in Incoterms for 2020:

*DAT (Delivered at Terminal) is renamed Delivered at Place Unloaded (DPU)
*FCA (Free Carrier) now allows for Bills of Lading to be issued after loading
Some other key changes include:
• CIF (Cost, Insurance and Freight) and CIP (Carriage and Insurance Paid to) set new standard insurance arrangements, although the level of insurance continues to be negotiable between buyer and seller
• Cost allocation between buyer and seller is more precisely stated where applicable
• FCA (Free Carrier), DAP (Delivered at Place), DPU (Delivered at Place Unloaded), and DDP (Delivery Duty Paid) now take account of buyer and seller arranging their own transport rather than using a third party
• Security-related obligations are now more prominent
• “Explanatory Notes for Users” for each Incoterm® have replaced the 2010 edition's Guidance Notes and are designed to be easier for users

Meanwhile, in an exclusive interview SCMR, two compliance experts shared new insights on the current state of the industry.

“With the purchase of Panalpina, we have been tasked with meeting new compliance deadlines using different IT systems,” says Kenneth Witkowski, Director of Quality & Compliance for DSV Air & Sea Inc. “But we are keeping ahead of the game by tracking what all the various registries are mandating.”

For Bernadette Métellus, LCB, CCS Director, Customs Compliance for DSV, the two greatest challenges are related to transparency and agility. “Shipper's expectations remain high even as compliance becomes more complex,” she says. “This involves using human capital strategically, while leveraging our technology to meet urgent demands.”

Copies of Incoterms 2020 can be ordered through the ICC and are available online at http://www.iccwbo.org

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