Managing Incoterms® 2020 export risks

Delivery of goods across international boundaries is an important consideration for any export sales contract. To assist international traders, the International Chamber of Commerce (ICC) published a new set of delivery terms - Incoterms® 2020, effective 1 January 2020. Using a practical approach, this paper considers the main Incoterms® 2020 rules through a risk management lens, highlighting major challenges and offering potential risk mitigation strategies to reduce exporter exposure in international sales contracts. The paper concludes that the exporting firm should adopt an enterprise risk management (ERM) approach to effectively minimise the risks associated with the physical delivery of export consignments.