TransportGistics

The economy and trade of the 21st century truly consists of one global market. While Buyers and Sellers very often find themselves on different continents in different parts of the globe, they can rest assured that they have a uniform and standardized set of trading International Commercial Terms (“Incoterms”) to help them navigate through international transactions and also elucidate each Buyer and Seller’s role in the supply chain.

What are Incoterms?

In the early 1900’s, international traders located in different countries devised short abbreviations for certain commonly used trading terms. However, due to differences in culture, connotations, dictions, grammar, experience, translations and linguistics, these trading terms had different meanings for different global participants. Confusion and errors became a regular staple and a consistent risk of international trading. Therefore, in order to foster consistency and eliminate confusion, the International Chamber of Commerce in 1936 developed one standard and uniform set of Incoterms for global traders to adopt. Since then, these Incoterms have played a key role in global commerce. Specifically, Incoterms address certain key responsibilities and obligations and establish significant “markers” along the chain of the micrologistics components.