Incoterms®: An Overview
What are Incoterms?
Incoterms are a set of 11 international trade rules issued by the International Chamber of Commerce (ICC) to define the responsibilities of sellers and buyers for the sale of goods in international markets. Each of these rules clarifies the costs, tasks, and risks to be taken care of by buyers and sellers during the completion of these transactions. If you’re an international seller, it’s helpful to familiarize yourself with Incoterms, in order to secure a smoother process of defining who is responsible for each step of the purchase and delivery.
There are 11 Incoterms rules and they are all grouped into two categories which reflect the modes of transport for the sold goods. For example, of these 11 rules, seven of them can be used for any and all mode(s) of transportation, while only four of them apply to sea, land, or inland waterway transport.
The Incoterms rules are edited or updated once every 10 years. Incoterms® 2020, the newest version, was released at the end of 2019 and was put to use starting on Jan. 1 of this year.