'Incoterms' is the short and concise way or saying International Commercial Terms. Published in 1936. Incoterms consists of a set of 11 rules that defines who is responsible for what during international transactions.

As Incoterms are internationally and globally recognised, and a requirement on every commercial invoice, they greatly reduce the risk of potentially costly misunderstandings.

Incoterms basically spell out all the tasks, risks and costs involved during the transaction of goods from seller to buyer.

• Buyer assumes almost all costs and risk throughout the shipping process

• Seller's only job is making sure the buyer can access the goods

• Once the buyer has access, it's all down to them (including loading the goods)

Risk transfers from seller to buyer:

At the seller's warehouse, offices or wherever the goods are being collected from

• Seller covers the costs and risks of transporting goods to an agreed address

• Goods are classed as delivered when they're at the address and ready to be unloaded

• Export and import responsibilities are the same as DAT

Risk transfers from seller to buyer:

When goods are ready for unloading at the agreed address

• Seller takes almost all responsibility throughout the shipping process

• They cover all costs and risk of transporting goods to the agreed address

• Seller also makes sure goods are ready for unloading, fulfils export and import responsibilities and pays any duties

Risk transfers from seller to buyer:

When goods are ready for unloading at the agreed address

• Seller assumes all costs and risk until goods have been delivered next to the ship

• Buyer then takes over risk and takes care of export and import clearance

Risk transfers from seller to buyer:

When goods have been delivered next to the ship

• Seller assumes all costs and risk until goods have been delivered on board the ship

• They also sort out export clearance

• Buyer assumes all responsibilities as soon as the goods are on board

Risk transfers from seller to buyer:

When goods have been delivered onto the ship

• Seller has the same responsibilities as FOB but must also pay the costs of bringing the goods to the port

• As with FIB, the buyer assumes all responsibilities as soon as the goods are on board

Risk transfers from seller to buyer:

When goods are on the ship

• Seller has the same obligations as CFR but must also cover insurance costs

• As with CIF, they're only required to purchase the minimum cover

• If the buyer requires more comprehensive insurance, they have to pay for it themselves

Risk transfers from seller to buyer:

When the goods are on the ship