Incoterms are a set of international rules for the interpretation of the most commonly used trade terms. Applying Incoterms to sale and purchase contracts makes global trade easier and helps partners in different countries understand one another.
They’re used to make sure buyer and seller know:
- Who is responsible for the cost of transporting the goods, including insurance, taxes and duties.
- Where the goods should be picked up from and transported to.
- Who is responsible for the goods at each step during transportation.
Every international contract also contains what is referred to as an Incoterm, or international commercial term. There are 13 main terms and several secondary terms that denote the points at which shipper, carrier, and consignee risk and responsibility start and end.
The parties to the transaction select the Incoterms, which determine who pays the cost of each transportation segment, who is responsible for loading and unloading of goods, and who bears the risk of loss at any given point during an international shipment.
I invite you to visit this link to know the responsibilities of the parties in the different types of incoterms. http://bit.ly/2mVkbPZ