INCOTERMS® 2020 – The main changes

Since January 1st, international trade has been under the new rules of Incoterms®. Incoterms® 2020 regulates the main terms to be included in transactions in all means of transport (air, rail, road or sea).

What are Incoterms

Generally, we call Incoterms – International Commercial Terms – to a set of rules that facilitate global trade operations. It is through these guidelines that the different global agents are able to communicate – in a standardized way – in the shipping and management of cargo.

This set of guidelines is published by the ICC (International Chamber of Commerce) which, since 1936, year of the first publication of Incoterms®, helps trade globally. It is considered an essential guide for all agents involved in import / export daily. Although they are not the only existing rules in the world, they are the most used on a global scope. Whether a purchase order is being made, the packaging or labelling of a cargo, transport or certificate of origin, the rules of Incoterms® always serve as a basis for guidance.

Incoterms® rules are applied by companies in countless commercial transactions around the world, reflecting ICC’s vision of ensuring peace, prosperity and equal opportunities through business.
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Incoterms – 11 basic terms

In practical terms, Incoterms® can be named with the universal acronyms that aid global communication. They are:

– Rules for any means of transport

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

– Rules for maritime and river transport

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

All of these 11 basic terms have a clear and objective meaning in the purchase and sale of goods in the four corners of the world, functioning as a common language to the entire universe of logistics & transport.

What has changed in Incoterms® 2020

Incoterms® had undergone the last update in 2010. Ten years later, the ICC understood that 2020 was the ideal time to proceed with a set of adjustments that mirror the changes in the international trading system.

In addition to simplifying information relating to each of the incoterms, the updated rules include explanatory notes and more improved details on the responsibilities of importers and exporters in each of the Incoterms® 2020 parameters.

Incoterms 2020 reflects the needs demonstrated in the market in relation to the bill of lading, with an onboard notation and the Incoterms® FCA (Free Carrier) rule. Different levels of insurance coverage are also aligned in the CIF and CIP.

In the most up-to-date version of the Incoterms, in force since the beginning of the year, transportation arrangements with their own means of transport in FCA, DAP, DPU and DDP are included. In Incoterms 2020 the DAT (Delivered at Terminal) are now DPU.

Incoterms® 2020 also includes safety requirements in obligations and transportation costs.

This article aims at a general approach of Extra Transportes to the theme, so that all technical issues related to Incoterms® 2020 should be directly addressed to the ICC and consulted on its portal at