History of changes to the Incoterms in the past years
In the last 3 years there have been some changes in the Incoterms (International Commercial Terms), which are of great importance for companies engaged in international trade.
In 2018, Incoterms were revised for the first time since 2010. The most important changes concerned the Incoterms FOB (Free on Board) and CIF (Cost, Insurance and Freight). With FOB, the responsibility for handing over the goods from seller to buyer was shifted to the border of loading, which led to greater transparency in terms of handover responsibility. CIF was completely deleted as it was hardly used in practice and the regulations could be covered by CIP (Carriage and Insurance Paid To) and DAT (Delivered at Terminal).
Another important update was made in 2019. Here, the Incoterm DAP (Delivered at Place) was renamed DPU (Delivered at Place Unloaded) to more clearly indicate the seller’s responsibility for unloading the goods at the destination. This change should help avoid misunderstandings between sellers and buyers.
The last important update in 2020, was a minor change related to Incoterms EXW (Ex Works). The regulations have been adjusted to clarify that the seller is merely making the goods available at a particular location and has no other obligations, such as providing transportation or insurance.
It is important that companies engaged in international trade are aware of the current Incoterms and their meanings in order to avoid misunderstandings and errors in trade transactions. Especially with the recent changes, companies need to adapt to minimize risks and increase efficiency. It is recommended to always consult an experienced and competent lawyer or consultant to ensure that the chosen Incoterms cover the needs and requirements of both parties