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WHAT ARE INCOTERMS?
WHAT ARE INCOTERMS?
Incoterms, or International Commercial Terms, are trade rules set by the International Chamber of Commerce (ICC) to define the responsibilities of buyers and sellers in international shipping. The latest version is from 2020.
Key Points:
Responsibility: Incoterms clarify who pays for shipping, insurance, and assumes risk.
Common Terms:
FOB (Free On Board): Seller delivers goods on board the ship; risk transfers at that point.
CIF (Cost, Insurance & Freight): Seller pays for shipping and insurance; risk transfers when loaded.
DAP (Delivered At Place): Seller delivers to a specified location, covering costs until unloading.
EXW (Ex Works): Seller makes goods available at their location; buyer handles all transport and risks.
Conclusion: Understanding Incoterms is crucial for smooth international trade.