Whether you are buying or selling, negotiating favourable commercial terms of sale is the most effective way to cut costs and optimize transit times.
The word “Incoterms” is an abbreviation of International Commercial Terms. Incoterms are the key element of international contracts of sale as they indicate whether the seller or buyer is responsible for:
- Arranging for carriage of the goods from seller to buyer
- Paying of the freight charges
- Transferring risks from the seller to buyer, and
- Performing export and import customs clearance
The wrong term is used almost 30% of the time, resulting in misunderstandings that almost inevitably lead to additional costs, most often for unwanted services.
For more information on Incoterms visit the International Chamber of Commerce’s (ICC) website at www.iccwbo.org, and for a complete list of Incoterm definitions including a chart of buyer and seller responsibilities, see Universal’s Incoterms 2010.
