Incoterms*, International Commercial Terms, were first published in 1936 by the International Chamber of Commerce (ICC). Since that time there have been six different revisions and updates to the Incoterms*, which were established to provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade.

The goal of Incoterms* is to reduce confusion over interpretations of shipping terms, by outlining exactly who is obligated to take control of and/or insure goods at specific points in the shipping process. The terms also outline obligations for the clearance of goods for export or import, as well as packing requirements.

There are 13 Incoterms*, each of which is a three letter acronym defining where the seller's responsibility ends. The terms are required to be written into purchasing or shipping contracts, and some also require the changeover point to be named.

In addition to buyers and sellers are "carriers", which refers to the people contracted to transport goods by land, sea, air or combined methods. A seller is given a bill of lading, way bill or carrier's receipt, which is the document used to prove that the goods have been taken on by the carrier.

The authoritative definition of each term along with a wallchart is available from the website of The International Chamber of Commerce (www.iccwbo.org/index_incoterms.asp), and can be obtained via their BOOKSTORE at www.iccbooks.com .



* “Incoterms is a trademark of ICC, registered in the European Community and elsewhere”.