Incoterms, also known as International Commercial Terms, are a set of rules that establish the rights and obligations of buyers and sellers in commercial transactions around the world. These terms define who is responsible for freight, insurance and charges during the carriage of goods. Incoterms have been developed and updated over time to adapt to changes in international trade and are widely used by businesses in the industry.

Incoterms are key to the global market and thanks to Incoterms, it is made concrete:

– A common basis for the interpretation of trade terms worldwide.

– The distribution of costs: the seller knows to what extent and to what extent he has to bear the costs arising from the purchase contract.

– Passing of risk: the buyer knows from what time and place the risks incurred by the goods during transport are borne by him.

– The place of delivery of the goods as they indicate the exact place where the seller must deposit the goods and the buyer must collect them.

As an international logistics operator working with the world’s leading shipping lines and freight forwarders, RFL Cargo uses these terms constantly in its daily operations. The best solution to establish the responsibilities and costs associated with the delivery of goods in commercial transactions.

Incoterms Classification

The International Chamber of Commerce classifies Incoterms into three different categories depending on what type of means of transport is used to transport the goods:

1. For all modes of transport:

– EXW (Ex Works)

– FCA (Free Carrier)

– CPT (Carriage Paid To)

– CIP (Carriage and Insurance Paid To)

– DAP (Delivered At Place)

– DDP (Delivered Duty Paid)

2. For maritime and inland waterway transport:

– FAS (Free Alongside Ship)

– FOB (Free On Board)

– CFR (Cost and Freight)

– CIF (Cost, Insurance and Freight)

3. For maritime transport only:

– DES (Delivered Ex Ship)

– DEQ (Delivered Ex Quay)

Each Incoterm establishes who should bear the costs and risks associated with the delivery of the goods at each stage of the transport process, including packaging, insurance, loading and unloading, transport or customs clearance. Therefore, it is important to choose the right Incoterm for each commercial transaction, depending on the means of transport, the needs of the parties and the characteristics of the goods.

RFL Cargo’s extensive experience

RFL Cargo is a company specialising in international transport and logistics services. It has extensive experience in handling import and export shipments and works with a wide range of clients in different sectors. The company maintains a close relationship with users to help them understand the terms of trade and select the best Incoterm option for their needs.