Incoterms in International Trade (CIF, FOB, EXW, Etc.) (2024)

Incoterms in International Trade (CIF, FOB, EXW, Etc.) (1)

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👨💼CFO, 📈Growth hacker, 💼 Business strategist, ✏️Thought Leader, 📝Change Manager, 📖Power BI/Ui Path/SAP/MS Excel expert, ⚡ AI enthusiastic

Published Mar 8, 2023

Inco terms, short for "International Commercial Terms," are a set of standardized rules used in international trade to define the obligations and responsibilities of buyers and sellers regarding the delivery, transportation, insurance, and customs clearance of goods.

When it comes to shipment, the following Inco terms are commonly used:

FOB (Free on Board): The seller is responsible for the goods and the costs associated with them until they are loaded onto the shipping vessel at the port of origin. After that, the buyer assumes responsibility for the goods and all subsequent costs.
CIF (Cost, Insurance, and Freight): The seller is responsible for the cost of the goods, the freight, and the insurance to cover the goods during transit until they arrive at the port of destination.
EXW (Ex Works): The seller makes the goods available to the buyer at their premises or another named location. The buyer is responsible for all costs and risks associated with transportation and customs clearance from that point onward.
DDP (Delivered Duty Paid): The seller is responsible for the cost of the goods, the transportation to the destination, and all associated customs duties and taxes. The buyer assumes responsibility for the goods only once they have been delivered to the agreed-upon destination.

It is important for both the buyer and seller to clearly define which Inco term will be used in a sales contract, as this determines their respective responsibilities and liabilities.

Incoterms in International Trade (CIF, FOB, EXW, Etc.) (2024)

CA, CS, CIMA Prakash Somani 🟢

👨💼CFO, 📈Growth hacker, 💼 Business strategist, ✏️Thought Leader, 📝Change Manager, 📖Power BI/Ui Path/SAP/MS Excel expert, ⚡ AI enthusiastic

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