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Incoterms


Introduction

Incoterms are a set of rules which defines the responsibilities of sellers and buyers for the delivery of goods under international trade. Incoterms are used to create a bridge between different members of the industry by acting as a uniform language they can use.It defines appropriate costs and responsibilities which are associated with the delivery of goods between buyer(importers) and supplier(exporters). The first incoterms was released in 1936. The most recent version of incoterms is incoterms(2010) and became effectine january 1,2011.

What are Incoterms used for?

Incoterms also deals with the documentation part of Global Trade, defines which parties are responsible for which document. In the end, however, the terms wind up boiling down to a few basic specifics:

  • Control: who owns the goods at a given point in the journey?
  • Costs: who is responsible for the expenses involved in a shipment at a given point in the shipment's journey?
  • Liability: who is responsible for paying damage to goods at a given point in a shipment's transit?

Category

Incoterms are listed by categories. These categories are listed as follows:-

  • C terms deals with shipments where the seller pays for shipping.
  • F terms deals with shipments where the cost of shipping is not paid by the seller.
  • E terms occurs when a seller's responsibilities are fullfilled when goods are ready to departure from their facilities.
  • D terms occurs when shipper/seller's responsibility ends when the goods arrive at some specific point.

References

For further details please visit the sites:-

www.iccwbo.org
www.export.gov