Incoterms are a set of standardized terms and definitions that are used in international trade to clearly communicate the responsibilities of buyers and sellers in the transportation and delivery of goods. There are 11 Incoterms in total, and they are divided into two categories: E (for delivery ex works) and F (for delivery free carrier). The 11 Incoterms are:
- EXW (Ex Works)
- FCA (Free Carrier)
- FAS (Free Alongside Ship)
- FOB (Free On Board)
- CFR (Cost and Freight)
- CIF (Cost, Insurance and Freight)
- CPT (Carriage Paid To)
- CIP (Carriage and Insurance Paid To)
- DAP (Delivered At Place)
- DPU (Delivered At Place Unloaded)
- DDP (Delivered Duty Paid)
Each Incoterm clarifies the tasks, costs, and risks to be borne by buyers and sellers in international transactions. It is important for buyers and sellers to carefully consider the Incoterms that are most appropriate for their specific trade arrangement, as they can have a significant impact on the overall cost and risk involved in the transaction.