Incoterms are the standard International transport agreements for commercial goods. These terms determine the division of liability and responsibility between the buyer and the seller.
The Incoterms are issued and published by the International Chamber of Commerce. The first edition of the Incoterms dates back to 1932. In order to keep up with the increasing amount of electronic data processing, the terms were revised in 1990.
In January 2020, the new Incoterms 2020 came in to force.
The Incoterms 2010 will remain in force, but we recommend that you use the new terms. These standard rules are used internationally, which creates clarity for both buyer and seller.
You can agree to the following matters by means of an incoterm:
- Who is responsible for transport insurances, licenses, authorizations and other formalities?
- Who provides the transport and up to where?
- When will the risks and costs of the delivery transfer from the seller to the buyer?
There are 11 incoterms: 4 are intended specifically for transport by water. The other 7 apply to all kinds of transport (multimodal transport).
- FAS – Free Alongside Ship
- FOB – Free on Board
- CFR – Cost and Freight
- CIF – Cost, Insurance and Freight
Incoterms multimodal transport:
- EXW – Ex Works
- FCA – Free Carrier
- CPT – Carriage Paid To
- CIP – Carriage and Insurance Paid To
- DPU – Delivered at Place Unloaded -> DPU replaces the term DAT
- DAP – Delivered at Place
- DDP – Delivered Duty Paid
Do you have questions regarding the new Incoterms 2020?
Contact us at firstname.lastname@example.org