Incoterms 2020

Transcript:

Incoterms 2020

Incoterms 2020, published by the International Chamber of Commerce (ICC) in September 2019, will be in full effect by January 2020.

Important Changes You Need to Know：

• DAT (Delivered at Terminal) changed to DPU (Delivered at Place Unloaded): This means the seller delivers the goods, and transfers the risk to the buyer. Removing the terminal reference allows for a more general use.
• Change of Insurance in CIP: In ICC Incoterms® 2020 CIP (Carriage and Insurance Paid to) has increased the insurance required to Clause A (Institute of Cargo Clauses), no change for CIF(Carrier Insurance and Freight). The reasoning is that CIF is more often used with bulk commodity trades, and CIP is more often used for manufactured goods.
• FCA (Free Carrier) and Bills of Lading: In Incoterms 2020, FCA has been changed to allow the parties to agree for the buyer to direct the carrier to issue the onboard bill of lading to the seller.
• Costs are Clarified: Incoterms 2020 clearly details the allocation of costs between seller and buyer, as a response to the increasing disputes about the allocation of costs, especially those in or around the port or place of delivery.
• Security Requirements: Transport security requirements have become more prevalent, as they bring cost, and risk delay if not fulfilled. Incoterms 2020 makes security obligations more prominent.

What should you do next:

• Identify what Incoterms your business typically uses.
• Consider if you are using the right Incoterm.
• Check the changes of Incoterms® 2020 and consider if that has any impact on you.
• Refresh your standard contracts to update them to refer to Incoterms® 2020.

Learn more about Incoterms at agility.com/smartshipping/