They provide a universal set of guidelines and rules with a common language that traders understand and can use to set the terms of their trades. Both the importer and exporter of goods are able to distribute the responsibilities of costs, risks, logistics, and transportation management from start to finish.<\/p>\n
What are the obligations of incoterms?<\/h2>\n
The main responsibilities of incoterms are:<\/p>\n
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- Point of delivery:<\/strong> the incoterms define the change of hands from seller to buyer.<\/li>\n
- Transportation costs:<\/strong> the incoterms define who pays for the required transportation of goods.<\/li>\n
- Export and import formalities:<\/strong> the incoterms define who arranges export and import protocol.<\/li>\n
- Insurance costs:<\/strong> the incoterms define who takes charge of specific insurance costs.<\/li>\n<\/ul>\n
![\"Incoterms](\"https:\/\/barcelona-logistica.es\/wp-content\/uploads\/2021\/10\/Incoterms_2021.png\")
\n![\"Incoterms\"](\"https:\/\/barcelona-logistica.es\/wp-content\/uploads\/2021\/10\/infografia_incoterms_2020.jpg\")
<\/p>\nWhat are the tyes of incoterms?<\/h2>\n
There are currently 11 different incoterms<\/strong> with each type divided into four groups: E, F, C, and D<\/strong>. These categories are determined by the delivery location and whether the buyer or seller is responsible for covering the cost part of each journey. These groups are then put into sub-categories referring to different scenarios. Look at a sample of incoterms here\u2026<\/p>\n
Intercom Group C is where the seller bears responsibility for all costs to the destination port until the goods are loaded onto the transport when the risks are transferred to the buyer. Group C incoterms include:<\/p>\n
Cost, insurance and Freight incoterm<\/h3>\n
The CIF incoterm<\/strong> defines that the seller will arrange insurance cover against the buyer\u2019s risk of loss or damage, with terms relating to waterway shipments. The seller must deliver the goods to a designated port and load them onto a specified vessel assuming responsibility for all transportation and loading costs as well. The buyer will assume the cost and risk associated with transporting the goods from the designated port to the warehouse or business premises.<\/p>\n
Intercom Group D terms relate to the destination of the goods and include:<\/p>\n
Delivery Duty Paid incoterm<\/h3>\n
The DDP incoterm<\/strong> refers to the seller being responsible for all costs and risks relating to the delivery of goods up until the buyers named place of destination. This includes clearing goods for export and import, paying any necessary duties, and carrying out customs formalities. The risk transfers from the buyer the moment the goods are available at the destination.<\/p>\n
Intercom Group F defines that the seller is responsible for delivering the goods to the buyer\u2019s pre-agreed method of transportation. Then the buyer will take responsibility for the costs and risks. Sub-groups in the F category include:<\/p>\n
Free on Board incoterm<\/h3>\n
The FOB incoterm<\/strong> is when the seller delivers goods on board a vessel nominated by the buyer. The seller must clear the goods for export. The responsibility is then transferred to the buyer once the goods are on board. FOB incoterms are used for waterway shipments.<\/p>\n
Free Alongside Ship incoterm<\/h3>\n
The FAS incoterm<\/strong> is where the seller delivers the goods alongside the ship or to a place that is accessible for handling at the port of shipment that\u2019s designated by the buyer. The risk of loss or damage to the goods passes when the goods are alongside the ship and the buyer will then be responsible for any costs.<\/p>\n
What are the advantages of incoterms?<\/h2>\n
- Transportation costs:<\/strong> the incoterms define who pays for the required transportation of goods.<\/li>\n