Ultimate Guide to Shipping Incoterms

The latest Incoterms available is the “Incoterms® 2020” edition, which replaced the previous “Incoterms® 2010” and continues to be effective in 2023.

Incoterms are periodically updated by the International Chamber of Commerce (ICC) to adapt to changes in international trade practices, advancements in transportation, and other relevant factors. The updates aim to reflect the current global trade environment and to provide more precise guidance for buyers and sellers involved in international transactions.

The ICC typically revises and updates the Incoterms every ten years or so. However, it’s important to note that businesses should always refer to the latest version of the Incoterms as soon as they are released to ensure compliance with the most current trade regulations and practices.

Incoterms are divided into four categories based on the level of responsibility, risk, and point of delivery they designate. These categories are:

1. E Terms (Departure): These terms place the maximum responsibility on the buyer. The seller’s obligation ends when they have made the goods available at their premises, and the buyer assumes responsibility for all further costs and risks from that point onward. EXW (Ex Works) is the primary Incoterm in this category.
2. F Terms (Main Carriage Unpaid): These terms indicate that the seller is responsible for delivering the goods to a carrier or another person nominated by the seller at a specific location. However, the risk transfers to the buyer once the goods are handed to the carrier. FCA (Free Carrier) and FAS (Free Alongside Ship) fall into this category.
3. C Terms (Main Carriage Paid): These terms signify that the seller must contract for carriage without assuming the risk of loss or damage to the goods or any additional costs after shipment. The risk transfers to the buyer when the goods are delivered to the carrier. CFR (Cost and Freight) and CIF (Cost, Insurance, and Freight) are part of this category.
4. D Terms (Arrival): These terms place the maximum responsibility on the seller. The seller is responsible for delivering the goods to the buyer at a named place in the buyer’s country and bears all risks and costs, including duties, taxes, and clearance. DDP (Delivered Duty Paid) is an example of an Incoterm in this category.

These categories help understand the distribution of responsibilities and risks between the buyer and seller in an international trade transaction, making it easier to choose the most suitable Incoterm for a specific business arrangement.

Incoterms are published and maintained by the International Chamber of Commerce (ICC). You can find the latest official information, guidelines, and details about Incoterms directly from the ICC website.

Here are some reliable sources to access Incoterms:

1. ICC Website: Visit the official International Chamber of Commerce website (iccwbo.org) for the most up-to-date information on Incoterms. They often provide detailed explanations, guides, and resources related to the latest version of Incoterms.
2. ICC Publications: ICC typically releases official publications, books, and guides dedicated to Incoterms. These publications offer comprehensive explanations, examples, and practical applications of the Incoterms rules.
3. Authorised Distributors: Certain authorised distributors or local chambers of commerce may also provide information and training sessions related to Incoterms. They often collaborate with the ICC to disseminate accurate and updated information.
4. Legal and Trade Resources: Legal and trade-related websites or publications may also offer information on Incoterms. However, it is crucial to ensure that the information they provide is aligned with the latest ICC rules and standards.

Always ensure that the information you refer to is from reliable and authorised sources, such as the ICC or its official partners, to guarantee compliance with international trade regulations and practices.