Incoterms® rules are frequently used worldwide in international and domestic contracts, illustrating responsibilities between buyers and sellers with regards to costs, risks, responsibilities for cargo insurance and regulatory compliance.

There are two key changes in Incoterms® 2020 compared to the 2010 edition:

  • 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

Other changes include:

  • CIF (Cost, Insurance and Freight) and CIP (Carriage and Insurance Paid To) set out new standard insurance arrangements, but the level of insurance continues to be negotiable between buyer and seller.

  • Where listed, cost allocation between buyer and seller is stated more precisely - one article lists all costs the seller and the buyer are responsible for.

  • FCA (Free Carrier), DAP (Delivered at Place), DPU (Delivered at Place Unloaded) and DDP (Delivered 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.

  • CIP now requires as default insurance coverage ICC A or equivalent. It was ICC C under Incoterms® 2010. Required insurance coverage under CIF remains.

8 views0 comments