AUSTRALIA TRANSHIPMENT SERVICE

INCOTERMS 2020 revision

Nine years on from the last revision, the Incoterms 2020 text has been updated. There are still eleven rules and seven rules that can be used with any transport mode. No rules have been removed or added. One rule has been renamed.

WHAT HAS CHANGED?

FROM DAT to DPU

  • The DAT rule Delivered At Terminal has been renamed DPU Delivered at Place Unloaded. This name change underlines the fact that delivery can happen anywhere, and not just at a transport “terminal”. As with DAT, this is the only rule that requires the seller to unload the goods at their destination.

FREIGHT INSURANCE

  • For the CIP rule (Carriage and Insurance Paid to), the level of cover required (unless otherwise specified in the agreement) is Institute Cargo Clauses (A), a higher level of cover than specified in Incoterms 2010, where the level of cover is Institute Cargo Clauses (C). For the CIF rule, there has been no change – the default level of cover remains at Institute Cargo Clauses (C). The reasoning here is that CIF is popular with commodities transactions, where this lower level of cover is widely accepted.

LETTER OF CREDIT AND BILL OF LADING

  • Incoterms 2020 tries to assist the seller when the FCA rule is used in conjunction with a letter of credit. The parties can agree that the buyer should instruct the carrier to issue the seller with a document such as an on-board bill of lading – something that banks often require under a letter of credit. This is clearly a “stopgap” solution to banks’ insistence on asking for on-board bills of lading for containers. It also does little to mitigate the underlying risk when allowing a buyer to arrange transport.

OWN VEHICLES CARTAGE

  • The Incoterms 2020 rules now cover the situation where either the buyer or the seller transports the goods using their own vehicles, without engaging the services of a third party

 

 

 

Source: https://www.incotermsexplained.com/incoterms-2020-coming-soon/

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