Curriculum
Understanding & Applying Incoterms 2020
Module 1: Introduction to Incoterms
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Module 2: Ex Works (EXW)
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Module 3: Free Carrier (FCA)
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Module 4: Carriage Paid To (CPT)
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Module 5: Carriage & Insurance Paid To (CIP)
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Module 6: Delivered at Place (DAP)
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Module 7: Delivered at Place Unloaded (DPU)
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Module 8: Delivered Duty Paid (DDP)
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Module 9: Free Alongside Ship (FAS)
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Module 10: Free On Board (FOB)
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Module 11: Cost and Freight (CFR)
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Module 12: Cost Insurance and Freight (CIF)
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Module 13: Choosing the Right Incoterm
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Module 14: Practical Application and Case Studies
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What Are Incoterms?
Incoterms, short for “International Commercial Terms”, are a standardized set of trade terms established by the International Chamber of Commerce (ICC). These terms are used to define the responsibilities and obligations of buyers and sellers in international trade transactions.
There are a total of 11 Incoterms in the 2020 version, ranging from Ex Works (EXW) to Delivered at Place Unloaded (DPU). The image above illustrates all Incoterms by obligation between the buyer and the seller in descending order.
Significance: Incoterms are essential in international trade because they clarify the distribution of risks, costs, and responsibilities between the parties involved in the transaction. They help prevent misunderstandings and disputes by providing a common language for international trade.
A Brief History of Incoterms
Origins: Incoterms have a history dating back to 1936 when the ICC introduced the first set of Incoterms. The primary purpose was to facilitate international trade and standardize the terminology used in contracts. Since then, Incoterms have been periodically updated and revised to adapt to changing trade practices.
Versions: Over the years, various versions of Incoterms have been released, with each version addressing new developments and practices in international trade. It is essential for traders to be aware of the latest version of Incoterms in use.