What are incoterms?
The Incoterms, or International Commercial Terms, is a set of pre-defined commercial trade terms published and updated multiple times by the International Chamber of Commerce (ICC). Incoterms provide a standard set of definitions for trade terms— delivery terms and terms of sale— for international trade use.
ICC first published Incoterms in 1930. Since 1990, ICC has issued revisions to address the changing landscape of international trade. These revisions have been published at the beginning of the year of each decade (1990, 2000, 2010). Incoterms 2010 are divided into 2 sets: the first set applies to any mode of transport, while the second only applies to goods shipped by ocean
With the latest update in 2010, Incoterms have dominated and in many cases, guided international trade into a more strict and easier direction. The 2020 revision will be in circulation and use starting on Jan. 1 of the coming year.
Incoterms are ubiquitous in international commerce— trade bodies, courts, and lawyers all advocate their use, as they serve as a universal language while defining sales agreements. Incoterms specify which part (seller or buyer) are responsible for costs and risks associated with international transportation and delivery of goods.
“Incoterms” is a registered trademark term of the ICC.