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What are the key changes in Incoterms® 2020?
The introduction in the most recent version explains the purpose and use of the Incoterms® rules, identifies the differences between Incoterms® 2010 and Incoterms® 2020.
Why was the Incoterms® FCA rule revised?
Free Carrier (FCA) has been revised for Incoterms® 2020 to accommodate a situation where goods are sold FCA for ocean transportation and the buyer or seller (or either party's bank) requests a bill of lading with an on-board note. FCA in Article A6/B6 now provides that the parties agree that the buyer will instruct the carrier to issue an onboard bill of lading to the seller once the goods have been loaded on board, and the seller will then present the document to the buyer ( often through banks).
Where are costs listed in Incoterms® 2020?
All costs associated with an Incoterms rule now appear in item A9/B9 of that rule, allowing users to see the full list of expected costs at a glance. In addition to the added presentation, the costs associated with each item still appear in the respective articles to accommodate a user who wants to focus on a specific aspect of the sales transaction.
What are the different levels of insurance coverage in CIF and CIP?
The Incoterms® 2020 rules provide for different levels of insurance coverage in the Cost, Insurance and Freight (CIF) rule and the Carriage and Insurance Paid To (CIP) rule. For the Incoterms® CIF rule, which is reserved for maritime trade and is often used in commodity trading, Institute Cargo Clauses (C) remain the default level of coverage, giving parties the option to agree a highest level of insurance coverage. The Incoterms® CIP rule now requires a higher level of coverage, pursuant to Institute Cargo Clauses (A) or similar clauses.
How does Incoterms® 2020 address the organization of transport?
You recognize that not all business transactions from seller to buyer are conducted by a third-party carrier.
Where is information on security-related requirements?
The latest edition includes clearer and more detailed security-related obligations in articles A4 on transport and A7 on export/import clearance of each Incoterms® rule. Costs related to these requirements also appear in the consolidated cost item, A9/B9.
Is the Incoterms® DPU rule new?
No, it was simply renamed and moved to more accurately reflect the content of the rule. The old Delivered at Terminal (DAT) has been changed to Delivered at Place Unloaded (DPU) to emphasize that the destination can be anywhere and not just a "terminal", and to highlight the only difference with Delivered at Place Unloaded ( DPU): under DAP, the seller does not unload the goods, under DPU, the seller unloads the goods.
And since delivery under DAP occurs before discharge, Incoterms® 2020 introduces the newly named DPU after DAP.
