The Nigerian Shippers’ Council (NSC) on Thursday urged stakeholders in the trade and transport sector to understand the rules of International Commercial Terms (INCOTERMS) 2020 to mitigate disputes and litigation.
The NSC Executive Secretary made the appeal at the INCOTERMS 2020 Stakeholders Workshop organised by the NSC in collaboration with the Nigeria International Chamber of Commerce (ICC) in Lagos.
According to him, adequate understanding of the rules will also go a long way in preventing waste of time and resources.
He noted that the INCOTERMS rules were series of pre-defined commercial terms published by the ICC, with the purpose of providing a set of international rules for the interpretation of the most commonly used terms in trade.
Bello added that they were aimed at curtailing to a considerable degree, the disagreement and uncertainties emanating from the different interpretations of such trade terms in different countries.
He said: “The workshop is very important to create the required awareness for all our stakeholders in the trade and transport sector to have a full understanding of the workings and application of INCOTERMS 2020 and to be able to make appropriate choices on the rules in their trading transactions.
“The INCOTERMS 2020 clearly spells out the rules viz-a-viz delivery, risk and costs as applicable to the different modes of transport in domestic and international trade from seller to buyer.
“ It is very explicit on obligations and responsibilities of the parties in the contract, taking into account some common complexities that usually arise and has included security-related requirements within carriage obligations and costs.
“The Verified Gross Mass (VGM), a new development in maritime trade is also addressed and this has been adjudged to be an improvement from the previous version, INCOTERMS 2010.
“It is pertinent for every stakeholder in the trade and transport sector in Nigeria to be conversant with the INCOTERMS, because it does not only apply to international trade, but also very relevant in domestic trade.
“When there is adequate understanding of the rules, it will go a long way in mitigating trade disputes and litigation and its waste of time and resources.”
Bello said that understanding and right application of INCOTERMS 2020 was very important for the Nigerian stakeholders to play significant roles in the working of African Continental Free Trade Area (AFCFTA).
He said that with recent developments in the inland transportation of goods through the rehabilitation and expansion of the Nigerian railway network, there was need to be adequately prepared for the increase in trading activities that the development would bring to international trade.
In her remarks, Secretary General, ICC, Nigeria, Mrs Olubunmi Osuntuyi, said the workshop was to sensitise stakeholders on INCOTERMS 2020 as a number of traders had lost huge resources due to lack of knowledge of international procedures and conventions.
Osuntuyi urged the trading public to be sure of any contractual agreement before they append their signature to avoid putting their resources to risk.
“We cannot afford at this level to be wasting resources. When people enter into contractual agreement with their trading partners whether within or outside the country, they should be sure of the agreement and operate from the point of strength.
“If they truly understand before appending their signature on such contract, they will look at it very critically so that they don’t put their resources to risk and they are sure that the essence of entering into that contractual agreement is achieved,” she said.
Also, Dr Obiora Madu, Chief Executive Officer, Multimix Group, said that as AfCFTA was on, the country needed to get its act together by what they do and also professionalise freight forwarding.
“INCOTERMS is like the pivot in international trade, if you are a freight forwarder, an importer or exporter, if we regulate international trade and you do not understand INCOTERMS you have not started and this why this is very crucial.
“It defines the responsibilities, the obligations of exporters, buyer and also the shipping company,” he said.
He also said that Nigeria was blessed and had a big role to play in international trade, and as biggest economy in Africa there was need to put its acts in order.