Incoterms rules (INternational COmmerce TERMS) are a total of eleven terms published by the International Chamber of Commerce (ICC) based in Paris which define the conditions of supply of goods in international sales transactions. The first edition was published in 1936 and subsequently have been making several revisions and updates (usually every ten years) to the one currently in force which is Incoterms 2010.
¿What are Incoterms used for?
The purpose of Incoterms is to precisely define three aspects of international trade:
- The allocation of logistics costs between seller an buyer.
- The transmission of risks in transporting the goods.
- The documents and customs formalities necessary for export and import operations.
¿Who needs to understand Incoterms?
The importance of Incoterms is due to its widespread use that makes them internationally known. Therefore, all professionals involved in foreign trade should understand Incoterms: exporters and importers, carriers and freight forwarders, customs brokers, insurers, international credit professionals, sales and purchasing managers, consultants, etc.
¿What are the 11 Incoterms of 2010 version?
Incoterms 2010 are classified in two categories according to the mode of transport:
Incoterms for any mode or modes of transport
EXW Ex Works
FCA Free Carrier
CPT Carriage Paid To
CIP Cost, Insurance and Freight
DAT Delivered At Terminal
DAP Delivered At Place
DDP Delivered Duty Paid
Incoterms for sea and inland waterway transport
FAS Free Alongside Ship
FOB Free On Board
CFR Cost and Freight
CIF Cost, Insurance and Freight
¿What does it take to use Incoterms correctly?
For the correct use of Incoterms, following the three letters of each term shall be included the exact place to which delivery of the goods is to be made, and afterwards the expression "Incoterms 2010".
Some examples of correct use of Incoterms 2010:
FCA Port of New Orleans, United States, Incoterms 2010
CIP Tianjin airport, China, Incoterms 2010
DDP Hampton & Stevens Ltd. Warehouse, Sidney, Australia, Incoterms 2010.
¿Where can I learn more about Incoterms 2010?
The ebook The Practical Guide to Incoterms 2010 provides all necessary information on each of the 11 Incoterms, with numerous charts and tables to understand how work and tips for use in daily practice. Click here to access the Guide.