For a successful and problem-free trading experience, both parties need to know their responsibilities. This is exactly where Incoterms come into play.
Overall, international trade can be quite confusing. Every country has its own laws and regulations exporters and importers need to be aware of. Similarly, for a successful and problem-free trading experience, both parties need to know their responsibilities. This is exactly where Incoterms come into play.
Incoterms are essentially a set of terms published by the International Chamber of Commerce (ICC). Incoterms are also known as international commercial terms. They are fundamental in international trade because they clarify the obligations of both buyers and sellers. By doing so, Incoterms prevent any confusion that may arise during transactions. Therefore, they are used in international trade frequently to understand the exact terms of agreements.
The history of Incoterms date back to the 1930s. The International Chamber of Commerce, also known as ICC, established Incoterms first in 1936. Since then, Incoterms have been updated periodically based on the changing practices in world trade.
When thought of as a set of rules and guidelines for international trade, Incoterms provide a safe environment for export and import. Acting as a common language between the buyers and sellers, Incoterms are helpful for parties to understand each other and their agreement more clearly. Activities that may seem simple such as labeling shipments or filling out a purchase order follow Incoterms.
Incoterms are made up of 11 rules established by ICC. These rules define the responsibilities of buyers and sellers during trade transactions. These rules define such responsibilities in detail so that there is no room for confusion. The rules clarify the tasks of both parties, costs and risks involved during the entire process. This gives the buyer and the seller a clear picture of what they need to do and what they need to know.
There are different Incoterms for different modes of transport. As of 2020, there are two main categories. One category involves rules regarding any mode of transport. The other category involves rules regarding sea and inland waterway transport. Let us examine each category in detail and the rules within each category.
There are seven Incoterms for any mode of transport. We have listed them and briefly explained what each of them means. Let us take a look.
There are different Incoterms when it comes to inland waterway and sea transport. We listed all 4 of them and explained them briefly.
It is important that importers and exporters know all the details regarding Incoterms. Because knowing the details of each Incoterms will help them choose the most suitable one. Choosing the most suitable option depends on the responsibilities buyers and sellers want to undertake.
Each of the Incoterms has different benefits for importers or exporters. They may want to reduce the risks involved in the transportation process, have more control over the costs or have more security in terms of logistics. Depending on their priorities, buyers and sellers should choose the Incoterms that are most suitable for their situation. This will allow them to have clear expectations regarding the process, know the risks and prepare accordingly.
As an importer, you can import products from Turkish Goods to have a problem-free process. The experts at Turkish Goods take care of the entire process and ensure security for both parties. Contact Turkish Goods to receive more information if you are planning to import goods from Turkey.