Incoterms® 2020

Incoterms® represent a global standard on how responsibilities, costs and risks are shared in international trade.

Incoterms® are globally recognized standardized rules for the distribution of obligations, costs, and risks in the international movement of goods. They specify which contractual partners are responsible for organizing transportation, loading and unloading, transportation insurance, various costs, and import and export clearance. The most important regulatory content, however, is the complexity of the transfer of risk with regard to accidental loss, accidental damage, or other deterioration of the goods.

Summary

Abbreviation Explanation

Rules that apply for any type of transportation or combined transportation:

EXW

Ex Works (named place)

FCA

Free Carrier (named place)

CPT

Carriage Paid To (named place of destination)

CIP

Carriage and Insurance Paid To (named place of destination)

DAP

Delivered at Place (named place of destination)

DPU

Delivered at Place unloaded (named place of destination)

DDP

Delivered Duty Paid (named place of destination)

Rules that apply only for ocean freight or
inland waterway transportation:

FAS

Free Alongside Ship (named port of shipment)

FOB

Free On Board (named port of shipment)

CFR

Cost and Freight (named port of shipment)

CIF

Cost, Insurance, Freight (named port of shipment)

Main Changes

Valid from 01.01.2020 in replacement of Incoterms® 2010

Changes concerning the D-Clauses
The DAT Delivered at Terminal clause has been deleted. Instead of the DAT clause, the DAP clause or the new term DPU (Delivered at Place, unloaded) can be used. In contrast to DAP, where the goods are delivered ready for unloading at the destination, with DPU unloading is always included.
Changes of insurance coverage concerning CIP clauses
The insurance coverage at CIP is now ICC-A (Institut Cargo Clauses: All Risk). In the case of the CIF clauses, the ICC-C (minimum insurance protection against named damaging events) continues to apply.
FCA with additional option
With the FCA (Free Carrier) sender clause, an additional option for on-board bills of lading (also On-Board-B / L or shipped on-board Bill of Lading) has been added to the Incoterms. This additional option may be necessary for letter of credit transactions because it confirms that the goods have been accepted on board a seagoing ship or that this is at least intended.

FCA, DAP, DPU and DDP - organize transports yourself on an Incoterms basis
What is new is that with the aforementioned clauses, the transport can also be carried out by the seller or buyer using their own means of transport.
Requirements and obligations related to sea freight transport
In the explanations of the Incoterms, specifications have been made with regard to the responsibility of the buyer and seller. This includes, for example, regulations in connection with the provision of data, goods security, import and export processing, as well as permits and licenses.