INCOTERM WHAT ARE THEY



                                    INCOTERM WHAT ARE THEY


Incoterms and intercoms may look as seemingly similar terms. There are chances that you may have misread the former one and now you are reading the first sentence again. Well these words may have been made up using the same set of letters but are hugely different from each other. You may now very well be wondering that what exactly are Incoterms?

Basically Incoterms is an acronym for International Commmercial terms. They are a set of protocols that are used in contracts pertaining to the import and export of goods. These commercial terms are published and reviewed by the International Chamber of Commerce under International Commercial Law. It simply defines the responsibilities of the supplier and the buyer to simplify the process of importing and exporting.

You might also be surprised to know that Incoterms dates back its first use to the year of 1936, when its first edition was published by the International Chamber of Commerce. Since then the Incoterms have gone colossal changes as there were six amendments to the original edition in 1953, 1967, 1976, 1980, 1990, and 2000 respectively. The eighth and the most recent change to it were published on January 2011. It is widely known as Incoterms 2010.

Incoterms have seven defined terms namely Delivery, Arrival, Free, Carrier, Freight Forwarder, Terminal and To Clear For The Export. These terms have their definitions attached to them.

Delivery: It is the stage at which the liability of the goods is transferred from seller to the buyer. Arrival: The stage mentioned in the Incoterm for which the carrier is paid
Free: Seller is obliged to deliver the goods to a named place for transfer to a carrier
Carrier: Carrier is a person who takes the responsibility of transporting the goods by any means of travel.
Freight forwarder: It is a firm or company which helps in arrangement of shipping.
Terminal: Places such as dockyard, warehouse etc
To clear for export: To get Export Permit by filing Shipper’s Export Declaration

As Incoterms deals with the import and export of goods it have certain laws for any mode of transport. But these may be confusing as these are written from a legal point of view, thus making Incoterms confusing. Some of the well known laws are EXW, FOB, FCA and CPT.

It is to be noted that buyers and sellers should go through Incoterms well before the contract of sale is made. This reduces unnecessary complications to the shipment. That being said, Incoterms really helps to simplify the process of importing and exporting the goods a lot.
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