Incoterms 2020 enter into force on 1st January 2020

Important: The version used must be specified in order to avoid complications.

From 1st January 2020 a. hartrodt will apply the Incoterms 2020. This is when the latest version of the "International Commercial Terms" comes into force. At the same time, Incoterms 2010 or earlier versions can continue to be used – and that makes it complicated. "As of the effective date, customers must specify exactly which version they are using," says Michaela Neubauer, Manager Sales Germany at a. hartrodt in Hamburg. The Incoterms have been adapted again and again since 1936. "Contractual partners must agree on a variant, which unfortunately rarely happens in practice," she observes.

Little changed at Incoterms 2020

The International Chamber of Commerce (ICC) in Paris published the lastest Incoterms version at the beginning of September. Neubauer's tip: Those who have not yet dealt with the new regulations should continue to work with the old version. "The changes are not as drastic as expected," she gives the all-clear. The structure and classification of the Incoterms 2020 correspond to the Incoterms 2010, but they are much more user-friendly.

New: DPU replaces DAT

"Some areas are clearer now," says Neubauer. She is particularly pleased that the DAT (Delivered At Terminal) clause has been changed to DPU (Delivered At Place Unloaded). "In the past, there were inconsistencies in what was meant by terminal," reports the manager. DPU also regulates that the seller has the obligation to unload the goods.

However, despite many simplifications, the Incoterms 2020 have been criticised for not taking into account the costs and obligations to determine the Verified Gross Mass (VGM), for example. Neubauer puts the problem in a nutshell: "It remains controversial whether the sender or recipient pays." It will also become more complicated in the future because the Incoterms 2020 have adapted the insurance coverage in the clauses CIF (Costs, Insurance and Freight) and CIP (Carriage, Insurance Paid To) to current business practice. While a. hartrodt has so far automatically insured "against all risks" on express customer’s request, a distinction is now made between insurable risks. "From our point of view, full insurance always makes sense, regardless of the delivery condition," says Neubauer.