The International Commercial Terms from which the word “INCOTERMS” is derived takes effect on January 1, 2020.

The Spanish Committee of the International Chamber of Commerce (ICC) Secretary General Jordi Sollarés, published a video on the internet:

http://www.iccspain.org/incoterms-2020-2/

where it explains the INCOTERMS historical development, from its creation until this last modification that will take effect this 2020. We recommend that you take a look.

Here you have some of the most important points of why about INCOTERMS:

• Opening of international trade and investment
• Facilitate transactions operations with international level
• Help to identify the rights and obligations of where the delivery of the goods takes place and who assumes the risks of the purchase sale and to where.
• Determine in which means of transport the goods travel and if there is an obligation to ensure the operation.

Although we always suggest you to make a contract of sale where you specify:

• Exact place of delivery of goods (warehouse, terminal, port or airport)
• Maneuvers fees
• Insurance and its coverage

Here you have the changes that will apply in 2020:

But these changes how do affect you as an importer and exporter? How does it impact logistics and customs companies?

It is important that you take into account that 20 years ago the acronyms E, F, C and D were used to choose the right INCOTERM. But is now recommended that they be used in the following order:

For any means of transport:

• EXW (Ex-Works)
• FCA (Free Carrier)
• CPT (Carriage Paid To)
• CIP (Carriage and Insurance Paid To)
• DAP (Delivered At Place)
• DPU (Delivered at Place Unloaded)
• DDP (Delivered Duty Paid)

For maritime transport:

• FAS (Free Alongside Ship)
• FOB (Free On Board)
• CFR (Cost and Freight)
• CIF (Cost, Insurance, and Freight)

INCOTERM DAT Removal

It was eliminated due to its inaccuracy, since the exporter was obliged to be responsible for all the logistics to the buyer's country, leaving the goods in a terminal or port (but did not specify which) and there were several confusions: in which terminal? What do we define as a terminal? Is the merchandise unloaded?

New INCOTERM DPU

The obligations for the exporter are the following:

• Pack and transport the merchandise to the port or crossing terminal, doing all the export procedures.
• Cross the merchandise or transport it to the destination country.
• Notify the importer when the goods are in the agreed place (it can be terminal, port, warehouse or other agreed place). Thus the importer can finish with the import procedures.

While the obligations for the importer are:

• Support the exporter with documents and information to complete the procedure.
• Receives the merchandise at the agreed point to do the corresponding customs procedures.

Different levels of insurance coverage in INCOTERMS CIF and CIP

CIF The minimum coverage clause is still considered (C)

CIP The (A) representing broad coverage is now required