Freight Glossary
Incoterms – Meaning & Examples
International Commercial Terms defining buyer/seller responsibilities in trade transactions.
- Related terms
- international commercial terms, trade terms, shipping terms
Incoterms (International Commercial Terms) are standardized trade terms published by the International Chamber of Commerce (ICC) that define the responsibilities of buyers and sellers for the delivery of goods. They specify who pays for transport, insurance, customs clearance, and when risk transfers. Current Incoterms 2020 include 11 terms like FOB, CIF, EXW, and DDP. Using the correct Incoterm clarifies obligations and prevents disputes.
Incoterms examples
- A contract specifying CIF Hamburg means the seller pays freight and insurance to Hamburg; risk transfers when goods are on board at origin.
How Incoterms is used in freight operations
Incoterms appears in quotations, bookings, shipping documents, and tracking updates. Confirm how it applies to your shipment with your carrier, forwarder, or customs representative, because practice can differ by country and contract.
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Frequently asked questions
What is Incoterms?
International Commercial Terms defining buyer/seller responsibilities in trade transactions.
What is an example of Incoterms?
A contract specifying CIF Hamburg means the seller pays freight and insurance to Hamburg; risk transfers when goods are on board at origin.