The Incoterm® rules are the world’s essential terms of trade for the sale of goods. The rules are a common set of rules and guidelines for traders around the world regardless of different practices or legal interpretations between traders.
The Incoterm® rules are published by the International Chamber of Commerce (ICC). The rules are maintained and developed every now and then, and Incoterms 2020 (the 9th version) was just recently released in September 2019.
Incoterms® 2020 will come into force by January 1, 2020, but they can already be used before if it is specified in the contract.
As per ICC, some of the noticeable changes in the Incoterms® 2020 include:
- Incoterms® 2020 provides for demonstrated market need in relation to bills of lading (BL) with an on-board notation and the Free Carrier (FCA) Incoterms® rule.
- Incoterms® 2020 aligns different levels of insurance coverage in Cost Insurance and Freight (CIF) and Carriage and Insurance Paid To (CIP).
- Incoterms® 2020 includes arrangements for carriage with own means of transport in FCA, Delivery at Place (DAP), Delivery at Place Unloaded (DPU), and Delivered Duty Paid (DDP).
- There is a change in the three-letter name for Delivered at Terminal (DAT) to DPU.
- Incoterms® 2020 includes security-related requirements within carriage obligations and costs.
If you want to read more about the Incoterms® please visit ICC’s website by clicking here.