What Changed in Incoterms 2020 Compared With Incoterms 2010
Incoterms 2020 replaced the 2010 edition on 1 January 2020. The headline is that not much changed, and that is worth saying clearly, because a lot of published commentary implies otherwise. The rules still number eleven, the two families are unchanged, and the risk transfer points are the same as they were.
What did change is worth knowing, because two of the changes affect cost and one affects your insurance position.
DAT became DPU
The clearest change. Delivered at Terminal, DAT, was renamed Delivered at Place Unloaded, DPU.
The rename was not cosmetic. Under DAT the delivery point had to be a terminal, which the ICC defined broadly but which still caused arguments about whether a factory yard or a warehouse forecourt qualified. DPU drops the terminal requirement entirely. The seller can now deliver unloaded at any named place.
DPU also moved in the running order. It now sits after DAP, which reflects the logic: DAP is delivery ready for unloading, DPU is the same delivery with the unloading done. DPU remains the only rule of the eleven that obliges the seller to unload.
CIP insurance rose to all risks
This is the change with the biggest financial consequence, and the one most often missed.
Under Incoterms 2010 both CIF and CIP required only minimum insurance cover, broadly equivalent to Institute Cargo Clauses C. Under Incoterms 2020 the two rules were separated. CIP now requires cover at the Institute Cargo Clauses A level, which is all risks. CIF was left at the minimum level.
The reasoning is that CIF is used mainly for bulk commodities, where minimum cover is the market norm, while CIP is used for manufactured goods where buyers expect proper protection. If you are a seller quoting CIP on 2020 terms, your insurance cost is higher than it was on 2010 terms. If you are a buyer, you now get materially better cover under CIP than under CIF.
FCA gained an on board bill of lading option
A narrow change that solves a real banking problem.
FCA is the correct rule for containers, but sellers shipping under a letter of credit often need an on board bill of lading to get paid. Under FCA delivery is complete when goods are handed to the carrier, which happens before loading, so the seller had no right to demand that document. Many sellers used FOB instead simply to satisfy the bank, and accepted the wrong risk profile as the price of getting paid.
Incoterms 2020 added an optional mechanism. The parties can agree that the buyer will instruct the carrier to issue an on board bill of lading to the seller. It is optional and it has to be written into the contract, but it removes the reason sellers were misusing FOB. If you sell containers under a letter of credit, this is the provision to know about. We cover the mechanics in our guide to Incoterms and letters of credit.
Costs listed in one place
The 2020 edition reorganized how each rule is presented. Every cost allocation for a rule now appears together in the A9 and B9 articles rather than being scattered through the text. Nothing about who pays what changed. It is a usability improvement, and a welcome one if you have ever tried to total up a party's obligations under the 2010 layout.
Security requirements made explicit
Transport security obligations, which had been dealt with lightly in 2010, are now set out clearly in each rule, with the associated costs allocated. Again this reflects practice that had already developed rather than introducing new duties.
Do you have to use the 2020 edition
No, and this surprises people. Earlier editions were not withdrawn. A contract can reference Incoterms 2010, or an older edition, and that reference is valid. What matters is naming the edition explicitly. Writing CIP followed by a named place with no edition leaves genuine ambiguity about which insurance level applies, and that ambiguity is exactly the sort of thing that surfaces after a claim.
Our practical advice is to state the edition in every contract, use 2020 for new agreements, and check any template that has not been reviewed since 2019. Our Mastering Incoterms 2020 course works through the current rules in full, and the Incoterms guide covers all eleven from the ground up.
Frequently asked questions
When did Incoterms 2020 take effect?
On 1 January 2020, published by the International Chamber of Commerce.
What replaced DAT in Incoterms 2020?
DAT was renamed DPU, Delivered at Place Unloaded. The delivery point no longer has to be a terminal, so the seller can deliver unloaded at any named place.
Can we still use Incoterms 2010 in a contract?
Yes. Earlier editions remain valid if the contract names the edition being used. The important thing is to state which edition applies.
What is the main difference between CIF and CIP insurance now?
CIP requires all risks cover at the Institute Cargo Clauses A level. CIF still requires only minimum cover. Before 2020 both required the minimum.
Did any risk transfer points change in 2020?
No. The points at which risk passes are the same as in the 2010 edition for every rule.
