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The Incoterms rules define the division of responsibilities between a seller and a buyer for the tasks, costs and risks involved in delivering merchandise. First introduced in 1936, they have been revised on a regular basis to reflect changes in international trade; since 1980 they’ve been updated every 10 years. The Incoterms revisions are changed in style and substance, improve certain aspects of the Incoterms and includes a detailed explanation of how to choose the most appropriate Incoterms rule for a sale contract.

The Incoterms 2020 consider of the growth of the economy, increasing attention to security in the transportation of goods, insurance coverage flexibility and on-board bill of lading under Free Carrier (FCA) rule.

As the international transport and logistics company Kuehne + Nagel International AG explains, differences between Incoterms 2010 and Incoterms 2020 are:

• The Incoterms® FCA (Free Carrier) now provides the additional option to make an on-board notation on the Bill of Lading prior loading of the goods on a vessel.

• The costs now appear centralized in A9/B9 of each Incoterms® rule.

• CIF now requires at least an insurance with the minimum cover of the Institute Cargo Clause (A) (All risk, subject to itemized exclusions).

• CIP requires at least an insurance with the minimum cover of the Institute Cargo Clause (C) (Number of listed risks, subject to itemized exclusions).

• The Incoterms® rules Free Carrier (FCA), Delivered at Place (DAP), Delivered at Place Unloaded (DPU) and Delivered Duty Paid (DDP) now take into account that the goods may be carried without any third-party carrier being engaged, namely by using its own means of transportation.

• The rule Delivered at Terminal (DAT) has been changed to Delivered at Place Unloaded (DPU) to clarify that the place of destination could be any place and not only a “terminal”.

• The Incoterms® 2020 now explicitly shifts the responsibility of security-related requirements and ancillary costs to the seller.

 

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Source: Kuehne + Nagel International AG

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