Question

Many people have heard or seen the Incoterm FOB. What are Incoterms? Look online to find listings of other Incoterms than FOB, describe at least one and how it might be used in commerce.

Answer 1

Incoterm is also known as international commercial term. It is a series of pre defined commercial term published by the international chamber of commerce (ICC) related to international commercial law. They are widely used in international commercial transactions or procurement processes and their use is encouraged by trade councils, courts and international lawyers.incoterm is a registered trademark of ICC. The first work published by the ICC on international trade terms was issued in 1923, with the first edition known as Incoterms published in 1936. The Incoterms rules were amended in 1953, 1967, 1976, 1980, 1990, and 2000, with the eighth version— Incoterms 2010— having been published on January 1, 2011. The ICC has begun consultations on a new revision of Incoterms, to be called Incoterms 2020.

There are many type of incoterm. Some of them are :

EXW - exWrok (2000 and 2010)

FCA - free carrier (2000 and 2010)

FAS- free alongside ship(2000 and 2010)

CFR - cost and freight (2000and 2010)

CPT - carriage paid to (2000and 2010)

DAF - deliver and frontier (2000)

DES - Deliver ex ship (2000)

And lot more

FCA( free carrier) - This term means that the seller delivers the goods, cleared for export, to the carrier nominated by the buyer at the named place. Seller pays for carriage to the named place.

The ICC (International Chamber of Commerce), per the 2010 revision, designed the incoterm FCA to accommodate the containerization of modern shipping. Under FCA terms, the seller and the buyer may agree to have the buyer pick up the goods at the seller’s premises, or another named location (e.g. CFS or CY).