Incoterms, short for International Commercial Terms, are a set of rules published by the International Chamber of Commerce (ICC) which define the responsibilities of sellers and buyers in the transfer of goods in international trade. These terms clearly establish who is responsible for the cost and risk at each stage of the goods’ journey from the seller to the buyer.
The selection of appropriate Incoterms in your trade agreement can significantly affect the cost, risk, and logistics of your export process. For instance, under the term “EXW” (Ex Works), the seller has the least obligation – they only need to make the goods available at their premises. On the other hand, under “DDP” (Delivered Duty Paid), the seller assumes all responsibilities and costs, including delivering the goods and clearing for import at the destination.
Understanding and appropriately using Incoterms can ensure a smoother export process, avoid disputes and misunderstandings. At EDS, we can help you understand and navigate the selection of appropriate Incoterms for your export transactions.