Incoterms® 2020 are valid as from 1st of January if no year is stated in the Incoterm®. Costs are now centralized per Incoterm® in section A9/B9 . Costs and responsibility of security related requirements are clearly shifted to the seller.
Significant changes in Incoterms® 2020
New arrangement of A- and B-articles
The A and B items (obligations of the seller and the buyer) were partially renamed and reordered. The content has not changed as a result of these changes, but it may mean that seller and buyer will have to adjust the obligations they have agreed to in the purchase agreements accordingly.
Cost overview new in A9 / B9
All costs are now summarized in A9 and B9. This gives the parties a new overview of all costs to be borne by them.
Renaming from DAT to DPU (Delivered at Place Unloaded)
The clause DAT (Delivered at Terminal) is renamed to DPU (Delivered at Place Unloaded). However, the content does not change from DAT to DPU. This means that in future any (agreed) place can be the destination.
FCA (Free Carrier)
Goods in containers intended for sea transport and sold under the FCA clause (Free Carrier) will have a new option from 2020:
- Buyers and sellers can agree that the buyer will instruct his carrier to issue a bill of lading or a bill of lading to the seller with an on-board endorsement after the goods have been loaded.
- At the same time, the seller is obliged to hand over this on-board bill of lading to the buyer. This is typically done through participating banks.
In the case of CIF (Cost Insurance Freight) and CIP (Carriage Insurance Paid), the seller has so far concluded a minimum insurance cover in favour of the buyer.
- CIF (Cost Insurance Freight) - the minimum amount of cover remains valid (amount of cover according to Clauses C of the Institute Cargo Clauses (LMA/IUA) or similar clauses)
- CIP (Carriage Insurance Paid) - the standard insurance obligation has been replaced by a more comprehensive "all-risk" coverage. (Amount of cover according to Clauses A of the Institute Cargo Clauses (LMA/IUA) or similar clauses)
The clauses CIF (Cost Insurance Freight) and CIP (Carriage Insurance Paid) contain an obligation on the part of the seller to cover the transport insurance for the distance between the passing of risk and the passing of costs. However, we recommend covering a warehouse-to-warehouse insurance (entire transport route).
Carriage of goods
Previously, the transport of the goods was regulated by the buyer or seller to a third party.
As more and more trading partners organise the transport of goods by their own means of transport, this was taken into account from 2020. In future, it will therefore be possible to conclude a transport contract or simply organise the necessary transport yourself.
Safety requirements for the transport of goods
Additional articles of safety-related obligations have been added to Incoterms 2020 to provide clear rules on the distribution of safety obligations and associated costs.