Course 1: Export Foundation Training

Module 6: Selecting Suitable Delivery Terms (Incoterms® 2020)

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Module six follows a different structure compared to the other modules. It is comprised of two topics and 10 subcategories focused on individual Incoterms®. Topic 1 is focused on providing the learner with a comprehensive introduction to Incoterms®, what they are and how they work. It also touches on the importance of Incoterms® in setting up a sales contract. After completing topic one you should have a good understanding of the full delivery process as well as which of the obligations or responsibilities falls on yourself or the buyer. 

Topic 2 is focused on discussing the 11 Incoterms®, how they work what their three-letter code means, what the cost implications are of each of the eleven Incoterms®, and which responsibilities or obligations fall on yourself and the buyer under certain Incoterms®. By understanding the Incoterms® as a whole you can make informed decisions on which delivery and trade terms to make use of for different consignments. Topic 2 make use of motion graphics and animations to easily communicate the various Incoterms® to the learners. 

The first four categories handle Incoterms® only to be used for consignments travelling by sea. Category one breaks down FAS or Free Alongside Ship Incoterms®, The second category discusses FOB or Free on Board Incoterms® followed by the third category which handles CFR or  Cost and Freight Incoterms®. The fourth category is the final category of Incoterms® to be used only for consignments travelling by sea. The fourth category focuses on CIF or Cost, Insurance and Freight Incoterms®. 

The next three categories focus on Incoterms® to be used for any mode of transport. Category five touches on FCA or Free carrier. Category six handles CPT or Carriage Paid To. Category seven breaks down CIP or Carriage and Insurance Paid. 

All of the Incoterms® the categories have discussed so far are departure terms. In the next three categories, it handles the first three arrival terms. Category eight is focused on DAP  or Delivered at Place. Category nine handles DPU or Delivered at Place Unloaded. Category ten discusses the last arrival term DDP or Delivered Duty Paid.

This free Module plays a vital role in your export foundation training. Understanding the various Incoterms® is crucial for companies looking to diversify their export markets while they deal with shipping challenges that affect their supply chain. Understanding the Incoterms® helps you as a seller to understand the cost, obligations and responsibilities of each party. Without this understanding, you could face financial strain or loss. Complete this module to take a step closer to exporting your products effectively and efficiently.