Incoterms 2020 Rules: Who Qualifies and What You Get
Learn how these standardized international trade terms define your responsibilities for delivery, risk, and costs during global shipping.
Incoterms 2020 Rules are a set of standardized terms used in global trade to define the specific responsibilities of buyers and sellers. They clarify exactly when the risk of loss or damage transfers from one party to the other.
Who it's for
These rules are designed for all participants involved in international trade, including buyers, sellers, and logistics providers.
What you get
By using these terms, you get a standardized way to communicate how costs, risks, and delivery obligations are shared. This helps prevent confusion by clearly outlining who is responsible for shipping, insurance, and customs duties.
What it costs you
There is no direct fee to use these terms, but they require precise language in your legal contracts. If you do not use the correct terms clearly in your agreements, you may face unexpected liability gaps or legal disputes.
The catch to know
A common and expensive mistake is using maritime-specific terms, such as FOB, for shipments that do not travel by sea. Using the wrong term for your specific mode of transport can lead to significant financial errors.
How to apply
- Determine the specific mode of transport for your shipment.
- Select the term that best matches how you want to split costs and risks.
- Ensure the chosen term is written exactly as intended within your commercial contract.
- Consult with a trade professional if you are unsure which term fits your specific logistics needs.