As is well known, international marketing methods have varied and are developed at the same time as technology is evolving, so constant modifications have been included to adapt them to current commercial practices and adapt them to the development of international trade.

What does INCOTERMS refer to?

They are terms, of three letters each, that reflect the rules of voluntary acceptance by the parties in a contract of international sale of goods about the conditions of delivery of the goods. 

They are used to clarify the costs of international business transactions, delimiting the responsibilities between buyer and seller, and reflect current practice in the international transport of goods.

We already know that the fundamental objective of incoterms is to establish defined criteria on the distribution of costs and the transfer of risks between the buying party and the selling party in an international sales contract.

Incoterms apply only in international sales of goods, not in services since these are intangibles in which logistics is not used. 

The incoterms regulate four basic aspects of the international sales contract: the delivery of goods, the transfer of risks, the distribution of expenses and the formalities of customs documents.

For the Incoterms to comply 100% with their functionality, there are 4 different types of these so that they can be used according to those processed between seller and buyer. These are the following: departure, without payment of the main transport, with payment of the main transport and arrival group where the delivery is included.

Tips for using INCOTERMS properly

o Agree on the specific term with the other party before starting transportation.
o Make sure that the term used is suitable for the chosen medium.
o Confirm that both parties understand the obligations indicated in the international sales contract.
o Indicate without errors the agreed type in the commercial invoice of the shipment.
o Periodically check the terms used and review your rights and obligations, if necessary.
o Keep in mind that it is not the responsibility of the Incoterms, to determine the ownership of a good, they should not be seen as an all-inclusive service, they should not be used as a Law, they are recommendations recognized as uniform international practice.

If you are thinking of entering the international logistics and transport market, this could be an investment to take into account, contact the financial consultants of Foster Swiss, consult independent international that offers you the possibility of organizing and creating adapted to the needs of the client, a new company or acquire an already constituted one for more information, communicate via info@fosterswiss.com emails