Announced this month and effective January 1, 2020, the 9th iteration of Incoterms ® is finally available from the International Chamber of Commerce (ICC). Updated from Incoterms ® 2010, Incoterms ® 2020 has been modernized address issues that weren’t prevalent a decade ago. Incoterms ® are the internationally standardized trade terms used to cover the primary obligations of buyers and sellers, insurance, and the division of costs. Contracts signed before September 2019 will be able to use the Incoterms ® 2010 even if the contract extends into 2020 unless otherwise specified in the contract; contracts signed between September 2019 and January 2020 should take care to specify which iteration will apply; after January 1, 2020 all parties should expect that any reference to Incoterms ® and the governing Incoterms ® of the contract will be Incoterms ® 2020.
One interesting modernization for Incoterms ® 2020 is the introduction of a mobile application that will include information, updates, training opportunities and event information. The new publication can be purchased from the ICC for both print and digital formats.
According to the ICC, significant changes 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, Delivered at Place (DAP), Delivered 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.
For further information we encourage you to reach out to your Edward J. Zarach representative to discuss how the changes may impact your freight. Also, if you’re looking for a great breakdown on the differences and updates to Incoterms ® 2020, Hellenistic Shipping News has a great chart for handy reference!