Incoterms
ISM GLOSSARY
OF KEY SUPPLY M ANAGEM ENT TERM S INCOTERMS
Incoterms (International Commercial Terms) were developed by the International Chamber of Commerce (ICC) as a uniform set of rules to clarify the costs, risks and obligations of buyers and sellers in international commercial transactions. Because they address issues relating to import and export, the Incoterms are most appropriate for use in international shipping; they are, however, used for U.S. domestic shipping as well. The Incoterms are periodically revised and multiple versions are available for use by contracting parties. Incoterms 2000 became effective January 1, 2000, and remain in effect. Incoterms 2010 are effective as of January 1, 2011. Refer to the ICC Web site at www.iccwbo.org/incoterms/id3040/index.html for information about these terms and their definitions, which are copyrighted by the ICC. Note: Although the new Incoterms 2010 became available for use as of January 1, 2011, Incoterms 2000 continue to be available. It is incumbent upon contracting parties to determine which term they want to use and to designate the version being applied. For some time the Incoterms have consisted of 13 terms. Incoterms 2010 eliminates four of the previously-existing terms (DDU, DES, DEQ and DAF) and adds two new terms (DAT and DAP), resulting in a total of 11 terms. The new version is made available for both domestic and international use; contracting parties should, however, review the applicability of these terms to the domestic environment prior to applying them. The terms are structured to increase incrementally the obligations (control, risk and cost) on one party while decreasing the obligations of the other, depending on the specific term chosen. Each term clarifies which party is responsible for: Inland freight (transportation within the origination country) Forwarder selection Export clearance Carrier selection and scheduling International freight Import clearance On-carriage (transportation
OF KEY SUPPLY M ANAGEM ENT TERM S INCOTERMS
Incoterms (International Commercial Terms) were developed by the International Chamber of Commerce (ICC) as a uniform set of rules to clarify the costs, risks and obligations of buyers and sellers in international commercial transactions. Because they address issues relating to import and export, the Incoterms are most appropriate for use in international shipping; they are, however, used for U.S. domestic shipping as well. The Incoterms are periodically revised and multiple versions are available for use by contracting parties. Incoterms 2000 became effective January 1, 2000, and remain in effect. Incoterms 2010 are effective as of January 1, 2011. Refer to the ICC Web site at www.iccwbo.org/incoterms/id3040/index.html for information about these terms and their definitions, which are copyrighted by the ICC. Note: Although the new Incoterms 2010 became available for use as of January 1, 2011, Incoterms 2000 continue to be available. It is incumbent upon contracting parties to determine which term they want to use and to designate the version being applied. For some time the Incoterms have consisted of 13 terms. Incoterms 2010 eliminates four of the previously-existing terms (DDU, DES, DEQ and DAF) and adds two new terms (DAT and DAP), resulting in a total of 11 terms. The new version is made available for both domestic and international use; contracting parties should, however, review the applicability of these terms to the domestic environment prior to applying them. The terms are structured to increase incrementally the obligations (control, risk and cost) on one party while decreasing the obligations of the other, depending on the specific term chosen. Each term clarifies which party is responsible for: Inland freight (transportation within the origination country) Forwarder selection Export clearance Carrier selection and scheduling International freight Import clearance On-carriage (transportation