Guida Pratica Incoterms 2020

Incoterms (International Commercial Terms) are the standardised trade terms, published by the International Chamber of Commerce (ICC) and valid worldwide, which identify the obligations, risks and charges associated with shipping goods.

The latest version, which entered into force on 1 January 2020, is a key instrument for regulating international imports and exports.

Incoterms are divided into 11 rules that can be classified into two main categories:

  • Terms for any mode of transport: EXW, FCA, CPT, CIP, DAP, DPU, DDP.
  • Specific terms for maritime and inland waterway transport: FAS, FOB, CFR, CIF.

Download our practical guide for a complete overview of these terms and their correct use in contracts. If you have specific requirements, we recommend that you consult an expert in international trade or contact a specialist logistics operator at Messaggerie del Garda.

DOWNLOAD THE PRACTICAL GUIDE

The differences between Incoterms 2010 and Incoterms 2020

  • New term DPU: the term DAT (Delivered at Terminal) was replaced by DPU (Delivered at Place Unloaded) to make it clearer that goods can be delivered not only at a terminal but at any agreed place.

  • Changes to the CIP and CIF: the Incoterm CIP now requires higher insurance coverage than before, while the CIF remains unchanged.

  • FCA: for the Incoterm FCA, the possibility of issuing a bill of lading with an ‘on board’ endorsement was introduced to facilitate the use of letters of credit in international transactions.

Some Practical Considerations on Incoterms 2020

  • Correct Use of Incoterms: it is important to specify the version of Incoterms used (e.g. ‘Incoterms 2020’) in the contract to avoid misunderstandings.

  • Insurance: when using terms that provide for compulsory insurance (CIP, CIF), it is necessary to verify that the policy offers adequate coverage for the buyer’s needs.

  • Customs duties: in terms such as DDP, the seller must understand the customs duties and regulations of the destination country well to avoid cost surprises.