With the new version of Incoterms we give you an update on all you need to know regarding the rules and what the main changes are compared to the 2010 version.
If you import and/or export cargo it is crucial to be up to date with the Incoterms. Choosing the right one for your transport chain will help you save both time and money.
What is an Incoterm and how did it come about?
The International Chamber of Commerce (ICC) publishes the Incoterms every ten year to make sure the terms follow the development of international trade. The latest edition of the Incoterms 2020 rules has already been launched and will be entering into force on 1 January 2020.
The Incoterms pre-defines commercials terms relating to International commercial law. The terms task is simply to aim to reduce confusion between the seller and the buyer by determining how costs and risks are allocated between the two parties.
Incoterms main responsibilities and obligations:
- Point of delivery: the point of change of hands from seller to buyer.
- Transportation costs: defines which party pays for the selected transportation.
- Export and import formalities: defines which party arranges for import and export formalities.
- Insurance cost: if seller or buyer takes charge of the insurance cost.
This is not regulated by Incoterms
- Payment conditions
- Penalties for breach of contract
- Force Majeure
Incoterms 2020 main changes:
- Every term is presented in a clear and more educational way
- FCA - option of Bill of Lading (BL) with on-board notation
- Different coverage of transport insurance for CIP and CIF
- DAT has been renamed to DPU