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Incoterms 2020: decoded for professionals

What's new in Incoterms® 2020? What changes will they entail when it comes to arranging your international freight? Incoterms decoded for freight professionals by a specialist.

Helene Plaquet, ICC accredited Incoterms® 2020 trainer at Mathez Conseil Formation and Head of customs formalities at Mathez Freight Forwarding gives us her first operational analysis:

The new 2020 version of Incoterms®, which comes into being on 1st January 2020 is more precise than its forerunner and has been technically upgraded with comparison tools aimed at professionals.

There are still the same number of Incoterms® (11) but some have been changed.

  • DAT (Delivered At Terminal becomes DPU (Delivered at Place Unloaded). The term “terminal” which was more restrictive, is replaced by “place unloaded”, which includes all possible delivery sites (worksite, airport, buyer’s premises etc.). DPU also increases commitment and risks on behalf of the seller, who will be responsible for unloading in the designated destination.

DPU is particularly suited to large projects, yards, onsite delivery etc. However be aware it will often require preliminary analysis of logistics.

  • A variant of the FCA is proposed which is more suited to documentary credits. The seller and buyer can now agree that the buyer will give instructions to their shipping agent to supply the seller with proof of loading.
  • CIP and CIF acknowledge mandatory levels of specific insurance in Incoterms® 2020. You will now need “fully comprehensive” cover for CIP and “minimal cover” for CIF.
  • Groups « E », « F » and « D » can now accommodate own transport. In the 2020 version, these incoterms enable sellers and buyers to use their own lorries, without using a service provider.
  • Remember: the Maritime Incoterms (FAS – FOB – CFR – CIF) should be used for goods that are transported in bulk, and not for container merchandise.
  • The ICC is reinforcing its recommendation not to use the EXW incoterm for international exchanges and to keep it for domestic shipping.
Hélène Plaquet

There’s no great revolution in Incoterms® 2020, but there are subtle differences which will require enhanced technical skills on behalf of freight professionals to avoid unfortunate surprises and to ensure they understand the risks and make the best choices. Do not hesitate to get in touch for specific advice.

Helene Plaquet, Mathez Freight Forwarding Nice
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