What are Incoterms?
Incoterms (International Commercial Terms) are a series of terms published by
ICC (International Chamber of Commerce) relating to international commercial law.
Incoterms are intended to communicate, costs, risks, and tasks associated with transportation and delivery of goods Together they form a collection of rules that define obligations, costs, and risks involved in the process of delivering goods from the seller to the buyer.
The rules are globally acknowledged by governments and legal authorities, they are intended to reduce uncertainties of different interpretations of the rules in different countries.
Place or point of delivery and destination
Two ports are important:
- The port where the goods are delivered on board the vessel.
- The port agreed as the destination of the goods.
The contract must specify a destination port, but it might not specify the port of shipment which is where the risk transfers.
The parties are well advised to specify the loading point at the named port of shipment as clearly possible.
Insurance
The shipper must also contract for insurance cover against the buyer’s risk of loss or damage to the goods from the port of shipment the at least the port of destination.