Shipping Incoterms

The term “Incoterms” is an abbreviation for International Commercial Terms.  The terms are used in international commercial transactions. The terms were created in 1936 by the International Chamber of Commerce (ICC), based in Paris France to standardize a general set of rules and terms for international trade.

Prior to the establishment of Incoterms, misunderstanding occurred due to the different trade terms and different countries interpretations. They established a standard set of rules between the sellers and buyers in commercial transactions. Since the origin of Incoterms, the rules have been updated several times to account for changes in international trade. Most recent update was in 2020 and is recognized worldwide as rules for international transactions.

Overall, Incoterms provide a standard for international trade by standardizing the language and rules used in commercial agreements. By promoting clarity, these terms make easier and more effective transactions between buyers and sellers across different countries and regions.

Today almost all world commercial transactions between the sellers and buyers utilize Incoterms to define, simplify and establish liabilities for commercial transactions.

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