A GUIDE TO INCOTERMS®

Understand how Incoterms® allocates responsibility, cost and risk across international shipments.

What are Incoterms®?

Incoterms®, short for International Commercial Terms, are pre-defined rules developed by the International Chamber of Commerce (ICC), providing a globally recognised legal and commercial standard for cargo in transit. 

Incoterms® are used in international sales contracts to clearly define the responsibilities of buyers and sellers, reducing confusion in cross-border trade. When applied to a transaction, both parties gain clarity of their respective obligations.

Key points to confirm upfront:

  • Costs: Which party pays for transport, handling and related charges at each stage

  • Responsibilities: Who manages export formalities, carriage and delivery activities

  • Risk: When responsibility for the cargo transfers from seller to buyer, and where insurance applies
     

Clear alignment helps prevent delays, disputes and unexpected costs during the international movement of goods.

There are 11 sets of Incoterms®:

  • Seven apply to any mode of transport

  • Four apply specifically to sea and inland waterway transport
     

The Incoterms® rules currently in force are Incoterms® 2020, published by the ICC in 2019.

What are Incoterms®?

Incoterms®, short for International Commercial Terms, are pre-defined rules developed by the International Chamber of Commerce (ICC), providing a globally recognised legal and commercial standard for cargo in transit. 

Incoterms® are used in international sales contracts to clearly define the responsibilities of buyers and sellers, reducing confusion in cross-border trade. When applied to a transaction, both parties gain clarity of their respective obligations.

Key points to confirm upfront:

  • Costs: Which party pays for transport, handling and related charges at each stage

  • Responsibilities: Who manages export formalities, carriage and delivery activities

  • Risk: When responsibility for the cargo transfers from seller to buyer, and where insurance applies
     

Clear alignment helps prevent delays, disputes and unexpected costs during the international movement of goods.

There are 11 sets of Incoterms®:

  • Seven apply to any mode of transport

  • Four apply specifically to sea and inland waterway transport
     

The Incoterms® rules currently in force are Incoterms® 2020, published by the ICC in 2019.