What are the stakes of incoterms in the transport of goods?

“Incoterms” is actually an acronym for “International Commercial Terms”. More concretely, this notion refers to all the rules governing trade between countries. These conditions of sale and delivery, which are drawn up universally for all states, enable the players to agree on the same basis. An essential reference for collaboration and regulation in the world of road haulage!

Definition of incoterms in road freight transport

Incoterms are rules published by the ICC, the International Chamber of Commerce, which apply to world trade. They define the basis of the compromise between buyer and seller, regardless of their country of origin. They have been designed to anticipate all risks of litigation and to simplify as far as possible the preparation and organization of each service, not forgetting the conditions of the transaction.

Incoterms are revised once every 10 years, in order to adapt to new practices and developments in international trade. The latest regulations in place date from January 1, 2020: ICC 2020, also known as Incoterms 2020.

Today, there are 11 different Incoterms, all consisting of 3 letters. One example is EXW. EXW, or EX Works, means that the goods are deposited at the factory, and that the buyer manages the relationship with the carrier. “DDP, or Delivery Duty Paid, means that the seller takes care of everything.

Each Incoterm consists of 3 letters, followed by the name of a city. For example, the incoterm “CIP + city” means that carriage is paid and insurance is included up to the city indicated. Incoterm clearly defines the responsibilities, rights and duties of each player at each stage of the supply chain.

Choosing road transport incoterms: how do you go about it?

To ensure the success of your international shipments, put your trust in Transports Goëvia! We have our own multimodal OVERSEAS transport plan, including real expertise and the possibility of taking charge of all customs formalities. Depending on the situation, we know which Incoterm to choose to guarantee the success of your road haulage operation.

Good to know: there’s a mnemonic to help you remember the meaning of incoterms, based on their first letter!

  • Incoterm beginning with “C”: transport costs are paid by the seller, and the buyer finances risk coverage.
  • Incoterm beginning with “D”: seller liable for risks
  • Incoterm beginning with “E”: goods are delivered to the consignee’s premises
  • Incoterm beginning with “F”: the buyer chooses the carrier, but does not pay for the service and does not finance risk coverage.

 

Guide

Guaranteed trouble-free delivery, in France and abroad

Whether you’re organizing a shipment in France or abroad, use our guide to avoid disputes and unforeseen events!

  • Identifying your needs
  • Communicate all relevant information to your carrier
  • Anticipate potential delivery problems
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