When The Choice Of Incoterms Is Limited







          When The Choice Of Incoterms Is Limited


There are scenarios in shipping where the buyer and seller have the limited choice of incoterms. It happens when the sale is completed alongside a letter of credit or documentary credit. This initiates a sequence that involves the seller providing copies of several documents to the bank including the landing bill or the airway bill. This happens in a scenario where there is limited or no trust between the seller and the buyer.

This means that only C terms can be used as EXW is not applicable because it demands the supplier to be paid before pickup. Also the F terms are not applicable as if the buyer cancels the international transit the seller will not have the required documents to present to the bank. D terms is also not applicable as the seller bears all costs of transportation and if buyer cancels out at the last minute then that will be a huge loss for the seller.
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