The Incoterms or International Commercial Terms are a list of specific commercial agreements published by the ICC or International Chamber of Commerce related to international commercial law. INCOTERM represents an agreement that governs the responsibility of sellers and buyers while shipping in international trade. Incoterms rules are planned majorly to get through the costs, tasks, and risk involved with global transportation and delivery of the goods from the seller to the buyer. These Incoterm contracts are accepted by all governments and legal authorities worldwide.
Defined Terms in Incoterms
In Incoterms certain terms have special meaning and some of the important terms are listed below
- Delivery: The point in the transaction of the goods where the risk of damage is transferred from the seller to the buyer.
- Carrier: Any person or organization which is responsible for the transportation by rail, road, air or sea or by a combination of such modes.
- Terminal: Places like warehouse, dock, container yard, rail or air cargo terminal.
- Freight Forwarder: Company which is responsible for the making of shipping arrangements.
- Arrival: Point named in incoterm agreement to which carriage has been paid.
Types of Incoterms for road transport
- EXW: Ex Works
- FCA: Free Carrier
- CPT: Carriage paid to
- CIP: Carriage and Insurance paid to
- DAT: Delivered at Terminal
- DAP: Delivered at Place
- DDP: Delivered Duty Paid