What are Incoterms?
Incoterms specify the mutual obligations between seller and buyer regarding the international transport of goods (e.g. transport costs, risks, etc.) to prevent a lack of clarity.
There are 11 versions of Incoterms. One version focusses on shipping, the others on all types of transport, such as transport by train, truck and airplane. An important component of Incoterms is the moment of transfer between seller and buyer. That can occur at the point of departure, means of transport, warehouse or national border. At that moment when the products are physically transferred, the responsibilities and costs are also transferred, such as:
- Cost of transport
- Accepting risks (damage or loss)
- Arranging the correct documents
- Ensuring the transfer of the load
- Concluding a contract of carriage and transport insurance
- Arranging customs clearance