The Incoterms 2020® Rules explain a set of 3-letter trading terms reflecting business-to-business practice in contracts for the sale of goods.
The Incoterms® Rules describe:
(1)Obligations
(2) Risks
(3) Responsibility for Costs – between the seller & buyer in the delivery of the goods
The Incoterms® 2020 Rules are not in themselves and no substitute for the contract of sale although they may be quoted in that contract of sale.
To be quoted correctly Incoterms® must have the following structure – term / named port, place or point / Incoterms 2020 (e.g. CIP Shanghai Incoterms 2020)
Incoterms 2020®
Rules for Any Mode of Transport
EXW – Ex Works –
FCA – Free Carrier – now has (2) options for the seller
CPT – Carriage Paid To
CIP – Carriage & Insurance Paid To
DAP – Delivered At Place
DPU – Delivered at Place Unloaded
DDP – Delivered Duty Paid
Rules for Sea & Inland Waterway Transport
FAS – Free Alongside Ship
FOB – Free On Board
CFR – Cost and Freight
CIF – Cost Insurance and Freight
Somewhat misleadingly & despite common usage by traders historically the latter group of terms are inappropriate for containerised cargo &/or if the goods are handed over to the carrier or container terminal before being alongside or on-board the vessel.
In that case then consider alternative terms (eg FAS = FCA ; FOB = FCA ; CFR = CPT ; CIF = CIP)
What are the Incoterms 2020® changes?
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.
Contact the friendly team at BCR for further information.
Author: Michael Cook BCR Customs & Trade Compliance Consultant
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Home » What are Incoterms 2020®?
What are Incoterms 2020®?
Read MoreThe Incoterms® Rules describe:
(1)Obligations
(2) Risks
(3) Responsibility for Costs – between the seller & buyer in the delivery of the goods
The Incoterms® 2020 Rules are not in themselves and no substitute for the contract of sale although they may be quoted in that contract of sale.
To be quoted correctly Incoterms® must have the following structure – term / named port, place or point / Incoterms 2020 (e.g. CIP Shanghai Incoterms 2020)
Incoterms 2020®
Rules for Any Mode of Transport
EXW – Ex Works –
FCA – Free Carrier – now has (2) options for the seller
CPT – Carriage Paid To
CIP – Carriage & Insurance Paid To
DAP – Delivered At Place
DPU – Delivered at Place Unloaded
DDP – Delivered Duty Paid
Rules for Sea & Inland Waterway Transport
FAS – Free Alongside Ship
FOB – Free On Board
CFR – Cost and Freight
CIF – Cost Insurance and Freight
Somewhat misleadingly & despite common usage by traders historically the latter group of terms are inappropriate for containerised cargo &/or if the goods are handed over to the carrier or container terminal before being alongside or on-board the vessel.
In that case then consider alternative terms (eg FAS = FCA ; FOB = FCA ; CFR = CPT ; CIF = CIP)
What are the Incoterms 2020® changes?
Contact the friendly team at BCR for further information.
Author: Michael Cook BCR Customs & Trade Compliance Consultant
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Your dedicated BCR account management team, along with our global network of freight forwarding professionals, will ensure all your organisation’s logistics needs are met while exceeding your expectations for customer service and performance every day.