International Commercial Terms are essential for the trade of good’s worldwide.
Incoterms® are terms published by the International Chambers of Commerce (ICC). First printed in 1936, the terms allow traders to define key roles and responsibilities in the movement of goods internationally (however, they have been know to be used domestically) as well as determine the point in which ‘risk’ is transferred from one party to another.
Some of the most common trade terms include EXW (Ex-works), DAP (Delivered at Place), CIF (Carriage Insurance and Freight) and DDP (Delivered Duty Paid). These three letter codes outline the responsibility of each party (buyer and seller) for the movement of the goods and the point in which the ‘transfer of risk’ takes place. This is particularly helpful when determining who should pay, who should provide certificates and who needs to comply with customs procedures.
Incoterms® allow both the buyer and the seller to clearly lay out the roles and responsibilities of the movement of goods from the very start. Incoterms® are generally laid out at the start of the sales process and normally stated on the Commercial Invoice or within the contract of sale.
If you sell goods under EXW, you are responsible for making the goods available at the defined location (usually your warehouse) however, Incoterms 2020 state that must also provide assistance to the buyer to obtain documents and clearance (at the buyer’s cost and risk). Each Incoterm contains additional considerations that we recommend reviewing prior to using an Incoterm.
If you have any questions regarding Incoterms® or would like to talk through your Incoterms selection and some of the particulars involved in the Incoterms agreed, please get in touch.
We can help guide you through your responsibilities as a buyer or seller based your agreed Incoterms or advise you on the place of which risk for the movement of the goods is transferred from, or to you.
If you’re looking to start importing or exporting or, are already moving goods across borders by sea, road or air
Get in touch for a no-obligation quote.
Ship, freight and customs agent headquartered in Dundee. Working throughout Scotland with offices in Grangemouth, Dundee, Montrose and Perth
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