Incoterms 2010 vs 2020: What Changed?
Introduction
The International Chamber of Commerce (ICC) updates Incoterms® roughly every decade to reflect changes in global trade. The most recent update, Incoterms 2020, introduced a few important adjustments from the 2010 edition.
While the overall framework remains the same, the updates clarify responsibilities, strengthen insurance requirements, and make the rules more practical for modern logistics. This article breaks down the key differences, why they were made, and what they mean for importers, exporters, and freight forwarders.
- DAT → DPU (Delivered at Place Unloaded)
- 2010: The term was DAT (Delivered at Terminal), meaning the seller delivered goods once unloaded at a terminal (port, airport, container yard).
- 2020: Renamed DPU (Delivered at Place Unloaded), broadening the delivery point to any location, not just a terminal.
Why it matters:
DPU offers more flexibility, especially for inland or project cargo delivered directly to warehouses, factories, or construction sites.
Example:
A heavy equipment supplier can now use DPU to cover delivery and unloading directly at a construction site rather than being restricted to a port terminal.
- Higher Insurance Requirements under CIP
- 2010: Under CIP (Carriage and Insurance Paid To), sellers only had to provide minimum insurance coverage (Institute Cargo Clauses C).
- 2020: Sellers must now provide higher-level insurance coverage (Institute Cargo Clauses A), unless otherwise agreed.
Why it matters:
Buyers get stronger protection for goods under CIP, particularly for high-value or sensitive cargo.
Example:
An electronics buyer under CIP now benefits from broader insurance coverage during transit, reducing exposure to financial loss.
- FCA and Bills of Lading Flexibility
- 2010: Under FCA (Free Carrier), buyers often struggled to obtain onboard Bills of Lading when cargo was delivered at an inland point before vessel loading.
- 2020: The new rules allow buyers and sellers to agree that the carrier issues an onboard Bill of Lading to the seller after loading, even if delivery occurred earlier under FCA.
Why it matters:
This change supports trade finance processes where banks require onboard Bills of Lading for payment under Letters of Credit.
- Clearer Guidance and Explanatory Notes
- 2010: Incoterms were concise but sometimes lacked clarity, leading to misinterpretation.
- 2020: The ICC added detailed explanatory notes and diagrams, making it easier to understand cost allocation, risk transfer, and responsibilities.
Why it matters:
Professionals new to Incoterms can now interpret the rules more confidently, reducing errors in contracts and operations.
- Costs and Security Emphasis
- 2010: Costs were implied but not always well detailed.
- 2020: Each rule now clearly lists which party is responsible for specific costs (e.g., terminal handling, documentation).
- Security obligations (like screening cargo) are more explicitly addressed.
Why it matters:
This reduces disputes over hidden charges and clarifies who pays for security checks, which are increasingly important in global trade.
Key Differences at a Glance
| Change | Incoterms 2010 | Incoterms 2020 | Impact |
| DAT renamed | DAT – Delivered at Terminal | DPU – Delivered at Place Unloaded | Broader delivery flexibility |
| Insurance (CIP) | Minimum (Clauses C) | Higher (Clauses A) | Better buyer protection |
| FCA & B/L | No onboard B/L if delivered inland | Sellers can obtain onboard B/L for buyers | Supports Letters of Credit |
| Explanatory Notes | Limited guidance | Expanded notes and diagrams | Easier interpretation |
| Costs & Security | Less explicit | Detailed allocation + security rules | Fewer disputes, more clarity |
Final Takeaway
While Incoterms 2010 and 2020 share the same foundation, the 2020 updates address real-world challenges: greater flexibility, stronger insurance, improved clarity, and support for financing.
If you’re still using older templates or referencing 2010 rules, it’s time to update your contracts to Incoterms 2020 to stay aligned with best practices in international trade.
👉 In the next article of our series, we’ll focus on how to choose the right Incoterm for your shipment, including practical decision-making tips and common mistakes to avoid.
