INCOTERMS
Incoterms refers to international standard trade terms that determine the responsibility for the delivery and risks of goods and services in international trade. Incoterms are a set of abbreviations published by the International Chamber of Commerce (ICC) and accepted worldwide.
Incoterms terms determine the terms of delivery agreed between seller and buyer and the stage at which responsibilities change as a result. These terms can also determine the cost of transportation of goods and the responsibility for insurance.
Incoterms terms are expressed by abbreviations such as FOB, CIF, EXW, DDP and DAP, each of which describes a specific delivery term. For example, the term FOB (Free on Board) means that the seller’s responsibility changes at the point where the seller loads the goods on board and the buyer unloads the goods from the ship, while the term CIF (Cost, Insurance and Freight) means that the seller assumes the transportation costs and insurance premiums for the goods.
Incoterms terms are used to reduce uncertainties and avoid disputes between parties regarding the delivery of goods and services in international trade.