From 1 January 2020, the new Incoterms came into force. These 2020 Incoterms follow the 2010 Incoterms, but the number of changes is not as high as what was predicted beforehand by some experts. However, this does not mean that the changes made are not important. Below, we will give a brief explanation of what exactly Incoterms are and then we will outline the most important changes.
The International Commercial Terms, or Incoterms, are drawn up by the International Chamber of Commerce (ICC). They are different delivery terms that can be included by the buyer and seller in (international) purchase agreements. There are 11 different Incoterms that try to solve possible interpretation problems between buyer and seller by making clear agreements on who bears the costs of transport, who bears the risks in case of loss of goods or damage and who is responsible for rules regarding customs.
Although not very many changes have been made to the Incoterms, it is still important to briefly outline the changes. First of all, the name of the DAT rule (Delivered at Terminal) has been changed to the DPU rule (Delivery at Place Unloaded). Indeed, there had been confusion because this rule suggested that delivery had to take place at a terminal, when it does not. There was also sometimes confusion between the DAT rule and the DAP rule because the words differ by only one letter.
Another change has to do with the FCA rule. Under this rule, a delivery takes place before the goods are loaded on board a means of transport. In the case of sea transport, the need arose for a so-called Bill of Lading, also known as a contract of carriage. By issuing this agreement, the master of a ship declares that he has received the goods listed on board, declares his agreement to transport the goods and, finally, the agreement is a security entitling him to delivery of the goods listed therein. The new Incoterms allow for the Bill of Lading.
Are you thinking about making an international purchase or sale and need advice on the most suitable Incoterm? Then contact us. Marxman has extensive knowledge of the differences between the eleven Incoterms and can therefore provide you with sound advice on the Incoterm that best suits your situation.