Incoterms, short for International Commercial Terms. A trademark of ICC, Incoterms were established to guide those working in global trade. Updated every 10 years or so, they offer a set of rules which define the responsibilities of sellers and buyers for the delivery of goods under sales contracts.

The last set of incoterms were published in 2010. A modified set of rules are to be effective January 01, 2020.

Incoterms are a critical component of your global trade and should be considered and decided carefully at the beginning each transaction. Choosing the wrong term or simply misunderstanding the term, can largely complicate and create unnecessary costs to your operation.

Considerations

When the goods you import or export arrive at their destination, the importing country requires that all applicable tariffs (import taxes levied by the destination country) and local taxes, including value-added tax (VAT), be paid.
Buyers typically want to know the final price, with shipping and taxes included (known as the “landed cost”), before they agree to buy, but you might not be able to provide it—tariffs and taxes vary widely throughout the world, so determining those rates before you ship can be difficult. Be clear about your policy on tariffs—specifically, who pays and when payment will be due.

The shipping companies you select often act as freight forwarders, helping you complete shipping documents, helping you estimate duties and taxes, pre-paying them for you, and then invoicing you.

For a current listing of Incoterms, reference our Resources Page

An updated listing for 2020 will be posted soon.

For more information on Incoterms in general; review ICC

For questions regarding your specific Incoterms or if you are requiring assistance in establishing new terms for your shipments, please contact a South East World Wide, Ltd. Sales Representative.