The Incoterms (International Commercial Terms), published by the International Chamber of Commerce (ICC), define the obligations, costs and risks between sellers and buyers in international trade. They are revised roughly every ten years – the current version, Incoterms 2020, was published in September 2019 and has been in force since 1 January 2020, replacing Incoterms 2010.

  • The most prominent change in Incoterms 2020 concerns the term DAT (Delivered at Terminal):

    it was renamed DPU (Delivered at Place Unloaded). The new name makes clear that delivery is not limited to a terminal – any agreed place of destination can be chosen, with the seller responsible for unloading the goods. DPU is the only Incoterm that obliges the seller to unload.

    • Insurance requirements were also differentiated. Under CIP (Carriage and Insurance Paid To), the seller must now provide the higher level of insurance cover in accordance with Institute Cargo Clauses (A) (“all risk”). For CIF (Cost, Insurance and Freight), the lower minimum cover of Institute Cargo Clauses (C) remains sufficient – contrary to a common misconception, CIF was not abolished and remains one of the four maritime terms.

  • A further practical improvement affects FCA (Free Carrier):

    the parties can now agree that the buyer instructs the carrier to issue an on-board bill of lading to the seller. This resolves a long-standing conflict between FCA and documentary letters of credit, which frequently require an on-board bill of lading.

    • In addition, Incoterms 2020 explicitly allow transport with the seller’s or buyer’s own means of transport under FCA, DAP, DPU and DDP, and security-related obligations and costs are now clearly allocated between the parties.
    As of today, Incoterms 2020 remain the current version. Companies engaged in international trade should ensure their contracts, order templates and master data reference the correct version and the appropriate term, as older versions such as Incoterms 2010 may still be validly agreed but can lead to unintended allocations of cost and risk. If you are unsure which Incoterm best fits your transaction, our consultants will be happy to assist you.