Incoterms (general)

Incoterms, or "International Commercial Terms," are rules established by the International Chamber of Commerce (ICC) to facilitate international trade. These standardized terms clearly define the responsibilities of buyers and sellers in international transactions, particularly regarding the transportation of goods, insurance, and customs formalities.

Why are Incoterms important?

Incoterms play a crucial role in global trade by reducing uncertainties and misunderstandings between contracting parties. By specifying who is responsible for each step of the logistics process, they help avoid disputes and ensure a fair distribution of costs and risks.

Categories of Incoterms

Incoterms are divided into two main categories:

1. Incoterms for all modes of transport: These terms apply to all methods of transport, whether maritime, air, road, or rail. Among them are terms like EXW (Ex Works), FCA (Free Carrier), and DDP (Delivered Duty Paid).

2. Incoterms for sea and inland waterway transport: These terms are specific to waterway transport. They include terms such as FOB (Free On Board), CIF (Cost, Insurance and Freight), and FAS (Free Alongside Ship).

Practical tips for using Incoterms

• Choose the right Incoterm: Make sure to select the Incoterm that best suits your business situation and supply chain.
• Be precise in your contracts: Clearly indicate the chosen Incoterm in your contracts to avoid any ambiguity.
• Stay informed of updates: Incoterms are periodically revised. The latest version, Incoterms 2020, introduced significant changes. Ensure you are using the most recent version.

In conclusion, Incoterms are an essential tool for anyone involved in international trade. They simplify transactions, reduce risks, and promote a common understanding between trade partners.