The International Commercial Terms are updated every 10 years and the last update was on January 1, 2020. Currently there are eleven terms that suggest understandings between the two parties in the international negotiation of products or services.
Incoterms® were created in Paris, in 1936, when the International Chamber of Commerce decided to standardize international contracts to facilitate understanding between the parties.
The Incoterms® define responsibilities for both costs and delivery of the cargo: agreements are defined regarding the extent to which the exporter has responsibility for the cargo and when the importer becomes responsible for the duties of costs, risks, and obligations.
Incoterms® are divided into four categories (E, F, C, D):
And what are the payment methods?
- Prepaid, which, as the name implies, is prepaid (before or immediately after boarding).
- Collect, when freight will be paid somewhere around the world.