To support companies in selecting the right Incoterms® 2020 rules, ICC Germany and Luther Law jointly developed an interactive digital tool. This tool analyses responses to a few key questions and recommends the most suitable Incoterms rule. Launched in 2021, the Incoterms® 2020 Digital Guide (referred to as the “Digital Guide”) is available free of charge in its basic version in both German and English. Three years after its introduction, we reflect on key insights and trends.
Usage and key findings
ICC Germany: The Incoterms® 2020 Digital Guide was published three years ago. First, a few statistical questions: How often has the guide been accessed? Who uses the guide, and which transport modalities are the most popular?
Dr. Christoph von Burgsdorff (Luther): By December 2024, the tool had generated over 10,000 recommendations in Germany and internationally, demonstrating a strong ongoing demand for guidance. Companies of all sizes and across various industries use the Digital Guide daily. However, the data also shows that many users struggle to select the correct rule, often leading to mismatches between contractual expectations and actual Incoterms provisions.
A notable trend is that sellers account for approximately 69% of all users. A majority of inquiries (58%) pertain to multimodal transport whereas 42% per shipment. Moreover, selecting the appropriate rule is particularly significant when deliveries cross an EU border (34%) or occur entirely outside the EU (31%). Around 6,500 users have indicated these scenarios.
Lessons from 10,000 uses
ICC Germany: Which insights have you gained from the 10,000 usages?
Dr. Christoph von Burgsdorff (Luther): The statistics reveal that only around 18% of users are confident in selecting the appropriate Incoterms® 2020 rule. This uncertainty can lead to discrepancies between what contract parties intend and what the rules stipulate. The data also suggests that users tend to default to familiar rules, often overlooking newer options like DPU (Delivered at Place Unloaded).
Oliver Wieck (ICC Germany): The high usage numbers indicate growing awareness of the importance of Incoterms® 2020 rules. This aligns with the core objective of the Digital Guide: to sharpen users’ understanding, encourage careful rule selection, and highlight the advantages and nuances of Incoterms® 2020. While the Digital Guide provides only an initial recommendation, it plays a crucial role in this learning process. Additionally, ICC Germany and Luther are developing further digital solutions for companies, including tools for internal training, contract drafting, and international contract negotiations.
Most frequently recommended Incoterms® rules
ICC Germany: Which Incoterms® rules are recommended the most, and why?
Robert Burkert (Luther): The most commonly generated rules by the tool are FCA (Free Carrier) and the three D-rules: DPU, DAP, and DDP. This is unsurprising given standard industry practices. Buyers and sellers often prefer delivery to occur at their respective locations, making these rules particularly suitable.
EXW (Ex Works), in contrast, is rarely recommended due to its limitations in cross-border trade, particularly concerning tax and customs regulations.
One particularly noteworthy insight is the increasing relevance of the DPU rule. The ICC Working Group revised the DAT (Delivered at Terminal) rule to make it more flexible, resulting in DPU, which allows delivery at any designated destination. This flexibility explains why DPU is frequently recommended.
The growing role of DPU
ICC Germany: Why has the DPU rule gained so much traction?
Oliver Wieck (ICC Germany): Compared to its predecessor DAT, DPU offers a key advantage: the designated place of delivery can be any location, not just a terminal. This enables sellers to organize transport using their own resources without requiring external operators or complex contractual adjustments.
DPU is particularly advantageous for sellers in cross-border transactions since import clearance remains the buyer’s responsibility. In contrast, the DDP rule is often impractical, as it requires sellers to handle import clearance, which can be challenging without local registration in the importing country.
For buyers, DPU is also beneficial since, unlike DDP and DAP, the seller is responsible for unloading and bears the associated risks until completion.
Barriers to adoption of DPU
ICC Germany: Despite these advantages, the data suggests that DPU is not yet widely adopted. Why is that?
Dr. Christoph von Burgsdorff (Luther): The primary reasons are historical. Many buyers prefer DDP, perceiving it as a “maximum obligation” for sellers. Sellers with limited knowledge of Incoterms® or weak negotiation positions often accept these terms without question.
Many contracting parties are unaware that DDP can be disadvantageous, particularly in cross-border transactions. Conducting a detailed analysis to determine the most suitable Incoterms® rule is often perceived as too time-consuming.
Robert Burkert (Luther): Even when companies attempt to research the best rule, they frequently rely on incomplete, outdated, or incorrect information found through online searches. Instead of thoroughly examining all eleven available Incoterms® 2020 rules, they make decisions based on fragmented third-party sources. This is where the Digital Guide provides valuable support, offering structured and reliable recommendations.
The role of AI in Incoterms® selection
ICC Germany: What role does artificial intelligence currently play, or could play, in the selection of Incoterms® rules?
Oliver Wieck (ICC Germany): At present, we strongly advise against relying on AI solutions like ChatGPT for Incoterms® guidance. Existing AI tools are not capable of generating legally compliant recommendations or drafting precise contractual rules.
Identifying the correct rule requires consideration of numerous factors, including contractual interests and interactions between different provisions. Current AI solutions lack the sophistication to handle this complexity.
Moreover, AI models primarily rely on freely available internet data, which often includes incomplete or incorrect information. For example, AI tools frequently recommend EXW, despite its unsuitability for most international transactions and the risks it entails.
By contrast, the Digital Guide provides tailored recommendations and, if necessary, direct contact with experienced experts for further consultation.
