Published in Inbound Logistics, March, 2012, ghost written for Anthony Hardenburgh
An Inbound Logistics article in October 2003, “Understanding Incoterms,” does an excellent job of explaining the concept of Incoterms, why they are necessary and how they work. We’d like to bring this article up-to-date with a discussion of the changes to Incoterms that began in January 2011. To recap, Incoterms are an internationally accepted set of standard commercial terms used between buyers and sellers. The terms 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. Managed by the International Chamber of Commerce (ICC), Incoterms are amended every 10 years. Recent changes saw the deletion of four existing terms and their replacement with two new terms. This brought the total number of Incoterms from 13 to 11.