When Bob Ronai started his career in international trade five decades ago, many of the defining characteristics of today’s global trade system did not exist. For starters, rule-setting organisations, like the European Union (EU) and World Trade Organization (WTO), were just ideas. In the absence of Skype and mobile phones, communication networks relied upon telephones, telefax machines, and paper documentation. Markets in Asia, Africa, and South America, were just beginning to integrate into the collective global trade system.
Based in Australia, Mr Ronai has witnessed first-hand many of the most important developments related to global trade. From digitalisation to containerisation, he has a story for every twist and turn of the global trade system over the past half century.
“I go back to the days…when you would go down to the wharf and even get invited on the ship by the captain and have lunch with them,” said Mr Ronai. “They were the good ol’ days as people would call it,” he reflected.
From Australia to Incoterms® 2010
After starting his career in international banking, Mr Ronai became an independent consultant and educator on back office functions for importers and exporters, including support with logistics and documentation protocol. Since 1991, Mr Ronai has provided consulting services and training sessions to traders from around the world. Due to his deep knowledge of trade responsibilities, Mr Ronai has served as an expert witness in several high-value trade disputes, including three cases exceeding US$1mn.
As Mr Ronai continued to expand his training offerings in the 1990’s, he became more interested in the Incoterms® rules. The Incoterms® rules are a set of trade terms developed by the International Chamber of Commerce (ICC) and published for the first time in 1936. Since their initial publication, the Incoterms® rules have been applied by companies in countless business transactions across the world, as part of ICC’s commitment to securing peace, prosperity and opportunity for all.
Due to their widespread application, it is important for traders around the world to have a deep understanding of the Incoterms® rules to clarify the responsibilities of importers and exporters and avoid costly misunderstandings.
While expanding his training sessions on documentation in the 1990’s, Mr Ronai considered the importance of integrating the Incoterms® rules into his lectures. “It was probably around Incoterms® 2000 that I started getting really interested because I was doing training seminars…in Australia on the back office – on documentation and so forth – so I had to find out what the Incoterms® rules were all about,” he said.
Following the publication of Incoterms® 2000, Mr Ronai began to offer his own training sessions on the Incoterms® rules to Australian importers and exporters. After building an established reputation as an educator and consultant on the Incoterms® rules, Mr Ronai was invited to participate in the drafting process of Incoterms® 2010. The Drafting Group receives, analyses, and discusses comments from ICC national committees around the world, including ICC Australia. On behalf of ICC Australia, Mr Ronai provided input on the drafting process of Incoterms® 2010.
While providing comments on Incoterms® 2010, Mr Ronai volunteered to contribute to the ICC Guide on Transport and the Incoterms® 2010 Rules, a handbook to support those in the transport sector working on transactions involving the Incoterms® rules.
Mr Ronai’s participation on the Working Group for the ICC Guide on Transport provided him with insight into the drafting process of the Incoterms rules. Mr Ronai found the Working Group to be overwhelmingly legalistic in its interpretation of the Incoterms® rules. As the only non-lawyer and non-European member of the Working Group, Mr Ronai would remind his colleagues, “But that’s not how it works guys…that might be how it works in Europe, but it’s not how it works elsewhere.”
Mr Ronai considers his identity as an Incoterms® rules user to be his badge of honour.
On his motivation for joining the Incoterms® 2020 Drafting Group, Mr Ronai said: “I’m going to make sure the Incoterms® rules reflect more closely what actually happens out there – not what European lawyers think happens.”
The voice of traders on the Incoterms® 2020 Drafting Group
Mr Ronai’s on-the-ground experience with the Incoterms® rules attracted the attention of Emily O’Connor, Director, ICC Knowledge Solutions, and Incoterms® 2020 Drafting Group member, who offered Mr Ronai a place on the Incoterms® 2020 Drafting Group.
As with the ICC Guide on Transport and the Incoterms® 2010 Rules, Mr Ronai urged the inclusion of the perspective of Incoterms® rules users as part of the Incoterms® 2020 drafting process. With this in mind, Mr Ronai sought to bring the voice of traders to the table of every meeting. “From a practical side of things, I kept hammering that we had to write the Incoterms® rules in plain English – not legal English – with a sentence structure in such a way that somebody who is not a native English speaker could easily understand them,” he said.
Mr Ronai’s calls to make the Incoterms® rules more accessible to all were echoed by other members of the Incoterms® 2020 Drafting Group, requested the creation of a mobile application and copies of Incoterms® 2020 to be translated into 29 languages. “The intent of the Drafting Group from day one was: this is important. Every trader should know about this,” he explained.
The Incoterms® 2020 Drafting Group devoted long hours to make sure that the latest edition of the Incoterms rules accurately reflected the ever-evolving global trade landscape. Beginning in 2016, the Incoterms® 2020 Drafting Group has received, analysed, and discussed over 3,000 comments from ICC representative offices known as national committees. Drafting Group members attended global ‘user’ consultation in Beijing in 2017 and London in 2018. The international editorial board met 12 times between July 2016 and September 2018. In total, Mr Ronai estimates that he has spent 800 hours contributing to the drafting process of Incoterms® 2020.
One of the biggest challenges for the Incoterms® 2020 Drafting Group was responding to comments from ICC national committees. “The biggest hurdle is the process. In that, we had to dissect Incoterms® 2010, make suggested improvements, then disseminate them to ICC national committees, and then wait. We got hundreds of responses,” he said.
Due to the global nature of the Incoterms® rules, conversations with users and ICC national committees from around the world were essential in the development of Incoterms® 2020. The Incoterms® rules are used daily in contracts for the sale of goods around the world, by enterprises of all sizes, from multinational enterprises (MNEs) to micro-, small-, and medium-sized enterprises (MSMEs). Each day, the Incoterms® rules are used by millions of companies around the world. Therefore this consultative process between the Drafting Group and ICC national committees was essential to make sure that the Incoterms® rules work for everyone, everywhere, every day.
“They are not a single country, or single customs union-type problem. You can’t isolate a problem to the EU,” said Mr Ronai. “[You have to ask] does it affect somebody in Ghana? Does it affect someone in Bangladesh? Or in the United States? Or in Argentina? They have to be universal,” he emphasised.
Commitment to making Incoterms® 2020 accessible to all
With Incoterms® 2020 set to launch in early September, Mr Ronai is showing no signs of slowing down.
“The importance of the Incoterms® rules has not been realised by the vast majority of traders out there. We have a huge responsibility to get the knowledge out.”
Mr Ronai has been working with ICC’s design team to ensure that all of the corresponding illustrations alongside each Incoterms® rule are a perfect match. For Mr Ronai, every detail matters, including the colours associated with each illustration. “It’s fine when nothing goes wrong, but when something goes wrong, then the arguments develop [and] somebody loses an argument,” he said. “Incoterms® 2020, hopefully, will help people understand their obligations, responsibilities and risks.”
Mr Ronai’s efforts to transform the Incoterms® rules are not limited to ICC.
Over the years, Mr Ronai has established himself as an Incoterms® rules social media influencer on Linkedin. As the owner of the highly successful INCOTERMS Linkedin Group, Mr Ronai has addressed common questions and misconceptions on the Incoterms® rules. The group boasts 19,294 members from a wide variety of professional and geographical backgrounds. On the success of his group, Mr Ronai said: “Where else are you going to get close on 20,000 people reading about the Incoterms rules? – only one forum.”
With an eye to the future, Mr Ronai believes that the Internet and new forms of digital technology serve as an advantage to spread awareness about the Incoterms® rules in the future. “Now, everything is at our fingertips, on the Internet, on our mobile phones. That’s a huge boon for ICC to get these rules out there and known by probably five to 10 times the number of people that knew Incoterms® 2010. Already, Incoterms® 2020 will include a mobile phone app to help provide Incoterms® rules users with updates on latest news, events, and access to certified experts. ICC is working with Perlin, a blockchain company based in Singapore, to issue the Incoterms® rules through the use of ‘smart contracts’ technology.
Reflecting on his time as a member of the Drafting Group, Mr Ronai said:
“I am very thankful for having the opportunity to be one of the members of the Incoterms® 2020 Drafting Group. I treat it as a privilege and I treat it as having been that opportunity to indulge in my passion.”
Listen to ICC’s conversation with Bob on the A Day in the Life of Incoterms® rules podcast.
Learn more about the launch of Incoterms® 2020.