New Incoterms 2020

After long 10 years, the International Chamber of Commerce (ICC) published a new issue of the Incoterms delivery terms this September. In the new Incoterms 2020, the ICC is following trends in the international commerce and meet demands of businessmen. The most important changes are particularly as follows.

DAT (Delivered at Terminal) term was renamed to DPU (Delivered at Place Unloaded). The purpose of this change is to reflect that goods can be delivered unloaded not only to a terminal (such as warehouse, port etc.), but also to any other place (such as buyer’s plant site).

Further, Incoterms 2020 newly foresee that a party can arrange for carriage of goods on its own. For instance, FCA (Incoterms 2010) delivery term provides a buyer’s obligation to contract on his own cost for the carriage of the goods, whereas now the buyer shall contract or arrange for carriage of the goods.

New wording of the FCA term also allows the parties to agree for the buyer to direct the carrier to issue the onboard bill of lading to the seller. The purpose of this change is to allow the parties to use the FCA term also in situations, where a document evidencing that the goods was delivered on board of a vehicle (e.g. a ship) is required by a bank according to a letter of credit.

Incoterms 2020 are intended for use as of January 1, 2020; however, you can already agree in a contract to use them. Alternatively, you can continue to refer to the previous edition Incoterms 2010 in the future, should you find it more suitable for your business. Nevertheless, it can be expected that most companies will start using the latest Incoterms 2020 in the coming months. According to information from the ICC Czech Republic, a Czech translation of Incoterms 2020 should be released in October 2019.