Incoterms: how responsibilities are shared between buyer and seller

In an international negotiation, setting the price is only part of the agreement. It is also necessary to establish where the seller’s and the buyer’s responsibilities begin and end.

Incoterms are internationally recognized rules that help define responsibilities related to delivery, costs and risks throughout the transport of goods.

Depending on the term chosen, certain stages may be the responsibility of the seller or the buyer. This affects how freight and insurance are contracted, logistics costs and the moment certain risks are transferred between the parties.

That is why the choice should not be made out of habit. Product, transport mode, origin, destination, company structure and commercial strategy must be taken into account.

Understanding these responsibilities before closing the negotiation helps build more consistent prices and reduces differing interpretations during the operation.

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