The differences between Incoterms 2010 and Incoterms 2020

The main differences between Incoterms 2010 and Incoterms 2020 are as follows:

If you already know about Incoterms 2010, this article is for you. You can just get updated fast and easy. So, I just cut the lines short and get right down to it.

1.    In Incoterms 2010, there was a term named DAT which stands for Delivered At Terminal. The word "Terminal" would cause confusion and to make it clear in the updated Incoterms 2020 version, this terms is removed from the list and was in fact replaced by DPU which stands for Delivered at Place Unloaded.

In DPU, it is clearly stated that delivery is made when the goods are Unloaded from the arriving vehicle to the named point of destination and the point can be, Terminal, Customs House, Warehouse, Port and any other place which is mentioned and agreed upon between seller and buyer.

2.    In Incoterms 2020, there is special emphasis on the responsibilities of the sellers. One of these point of attentions is insurance in CIP terms. In Incoterms 2010, the seller was responsible to provide insurance with only minimum coverage like Clause C, while in Incoterms 2020 the seller is responsible to provide the maximum coverage like Clause A. The reason is, in CIP, the goods can possibly go through more than one mode of transportation hence exposed to more risk which necessitate a higher quality insurance coverage.

In CIF however, just like the 2010 version, the seller is only responsible to provide minimum insurance coverage. In fact, it remains unchanged in Incoterms 2020.

3.    In Incoterms 2020, it is assumed that the seller can use their own vehicles for the transportation of the goods if the seller has the required facilities and this assumption is stated in the literature of Incoterms 2020.

4.     In Incoterms, On-Board BL in FCA terms is paid attention to. Most of the time, one of the requirements of the LC (Letter of Credit), is that the seller is required to give On-Board BL to the bank while in FCA rule, the goods are handed over to the transport service provider before the goods are loaded on board a vessel which means there is no On-Board BL. The port for example is Hamburg while the goods are handed over to the transport service provide in Frankfurt. In Incoterms 2020, it is clearly stated that the buyer can ask the transport service provider to issue an On-Board BL even before the goods are loaded on board a vessel, nonetheless, the transport service provider has the right not to accept this request. In fact, it is more of a cooperation between the buyer and the seller rather than an obligation. This is however something that is paid attention to.

5. In Incoterms 2010, there is no mention of any safety and security measures taken by the seller while in the 2020 version of Incoterms, it is clearly mentioned that the seller is required to take any necessary measures for the safety and security of the goods during transportation process and pay for any necessary charges involved (where the seller is responsible for such measures).