• Logistics Made Simple

Incoterms® 2020 – What You Need To Know

Incoterms® have been updated for 2020 - it’s the first time there has been a significant update since 2010. What Incoterms® have changed? What Incoterms® are right for your business? This page is dedicated to giving you the answers.

What are they?

Produced by the International Chamber of Commerce, Incoterms® are terms of trade for the sale of goods. They define what the responsibilities are in sales contracts for the delivery of goods between buyers and sellers worldwide

Why are they important?

There are two key reasons why it's critical to understand Incoterms® 2020 for your business. First, the terms clearly define the shipping responsibilities and liabilities of both parties.

Next, it's about efficiency. Logistics costs equate to approximately 5 to 10 percent of company revenues – a significant component affecting your bottom line. Ensuring proper control over the execution and management of cost and other factors (ex. optimal shipping route) is essential to your success.

Without this control, you lose the ability to budget, forecast, manage by exception, innovate, cost-save and adapt when issues arise.

What’s Changed?

There are two key changes in Incoterms® 2020 compared to the 2010 edition:

  • DAT (Delivered at Terminal) is now Delivered at Place Unloaded (DPU)
  • FCA (Free Carrier) Bills of Lading can now be issued after loading

Other changes:

  • CIF (Cost, Insurance and Freight) and CIP (Carriage and Insurance Paid To) have new standard insurance arrangements. However, the level of insurance remains negotiable between buyer and seller
  • Where listed, cost allocation between buyer and seller is more precise, with one article that lists all costs for which both the seller and buyer are responsible
  • FCA (Free Carrier), DAP (Delivered at Place), DPU (Delivered at Place Unloaded) and DDP (Delivered Duty Paid) now take account of buyer and seller arranging their own transport instead of a third party
  • Security-related requirements are now more clearly outlined
  • “Explanatory Notes for Users” per each Incoterm® is a simpler replacement for “Guidance Notes”
  • CIP now requires ICC A or equivalent as default insurance coverage. Preciously, this was ICC C. Please note that the CIF default insurance coverage remains

What Incoterm® is Best for My Business?

Delmar Experts consult with businesses of all sizes, ensuring optimum results within their supply chain. Fill out the form below to talk to an Expert.

First Name
Last Name


Choosing the right Incoterms® - Download a Sample Scenario
Podcast: Drafting the Incoterms® 2020 rules

This page is for information purposes only. Delmar International Inc. is not responsible for any Incoterms® related transactions between buyers and sellers.