We assist in facilitating a seamless export transaction while mitigating the risk of costly errors by employing globally acknowledged Incoterms® to delineate responsibilities, expenses, and liabilities for both buyers and sellers involved in these dealings.

Why Incoterms are Crucial in Global Trade?

The Incoterms® consist of 11 distinct rules established by the International Chamber of Commerce (ICC) to outline the obligations of sellers and buyers in international sales of goods. These rules are crucial for clarifying responsibilities, costs, and risks in such transactions, thereby enhancing smoothness and clarity throughout the process. Familiarity with Incoterms can greatly aid in defining each party’s role and responsibilities at every stage of the transaction.

The Incoterms® 2020 rules have been recently updated and categorized into two groups based on the modes of transportation involved. Among the 11 rules, seven are applicable to ANY mode(s) of transport, while four are specifically tailored for SEA, LAND, or INLAND WATERWAY transport. In 2024, Incoterms® still follow the 2020 rules.

Quick tips about Incoterms

Understanding Cost Allocation:

One of the fundamental aspects of Incoterms® is determining who will bear the costs associated with the shipment. This includes costs such as transportation, insurance, and any applicable customs duties and taxes.

Clarifying Obligations:

Each party involved in the transaction must understand and agree upon their specific obligations throughout the shipping process. These obligations may include tasks such as packaging, loading, unloading, obtaining necessary documents, and arranging transportation.

Assessing Risk:

Another crucial aspect of Incoterms® is the allocation of risk between the buyer and the seller. Depending on the chosen Incoterm®, responsibility for the goods and the associated risks may shift at different points during the transportation process. It’s essential to clarify who will bear the risk of loss or damage to the goods, as well as who will arrange and pay for insurance coverage.

Incorporating Incoterms® into Contracts:

When using Incoterms® in a sale and purchase contract, it’s essential to establish and agree upon the specific terms before finalizing the deal or booking transportation. This ensures clarity and prevents misunderstandings regarding each party’s rights, responsibilities, and liabilities.

Consulting Official Sources:

The International Chamber of Commerce (ICC) provides comprehensive information and updates on Incoterms®, including the full obligations and risks associated with each set of terms. It’s advisable to consult the ICC’s official resources and seek legal advice to determine the most suitable Incoterms® for your specific transaction.