Incoterms, short for International Commercial Terms, are a globally recognized set of rules established by the International Chamber of Commerce (ICC). These rules define the responsibilities of buyers and sellers in international trade transactions. In simpler terms, Incoterms act like a common language for international trade, outlining:

 Who is responsible for what: They clarify which party (buyer or seller) is accountable for tasks like packaging, loading, transportation costs, insurance, customs clearance, and risk of loss or damage during the journey.

When the ownership of the goods transfers: Incoterms specify at what point in the shipping process ownership of the goods officially transfers from seller to buyer.

Having a clear understanding of Incoterms helps avoid misunderstandings and potential disputes between buyers and sellers involved in international trade.  Incoterms are particularly important because they apply across different countries, which may have varying legal and commercial practices.

 Get to know more on Incoterm Rules, Join us on next week as we discuss the 11 current incoterm rules assigned to buyers and sellers.