Incoterms®

The 2020 revision covers 11 different stages of delivery, with each Incoterm® specifying varying levels of cost, risk and responsibility for an exporter. Incoterms® have nothing to do with payment methods or the point at which ownership passes from the seller to the buyer. They are concerned only with delivery and relate only to the seller and the buyer.
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As we discussed in our 'Incoterms® explained' article, Incoterms® are reviewed more or less every ten years, with the latest version being Incoterms® 2020. The 2020 revision covers 11 different stages of delivery, with each Incoterm® specifying varying levels of cost, risk, and responsibility for an exporter. Incoterms® have nothing to do with payment methods or the point at which ownership passes from the seller to the buyer. They are concerned only with delivery and relate only to the seller and the buyer. This article focuses on Ex Works and its implications for the seller.
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Incoterms® indicate which party to a contract bears the risk, costs, and responsibilities at any given time during the delivery of goods in a particular transaction. The ICC currently promotes eleven Incoterms®, and each term has a unique allocation of risk, cost and responsibility for both buyer and seller. In this article, we list the 11 Incoterm® rules, explain how the terms are categorised and indicate the Incoterms® rules that only apply to ocean transport.
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Incoterms® are a standard set of rules developed by the International Chamber of Commerce for the delivery of goods. Incoterms® indicate which party (buyer or seller) to a sales contract bears the risk, costs and responsibilities at any given time during the delivery of goods in a particular international transaction.
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Without the rules set out by the ICC, trading across borders and oceans would not only be a tedious task but also costly, given the almost inevitable misunderstandings and misinterpretations of foreign rules that would occur. Knowing the Incoterms® Rules gives you the upper hand and guarantees smooth sailing on your export journey.
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