Incoterms decision chart BUYING AND SELLING

Incoterms are a set of 11 simple three letter codes (EXW, FOB, …) which represent the different ways international shipments may be organized. They allow sellers and buyers from different cultures and legal systems to agree at what point the costs and risks of delivery transfer from one to the other, who has to book the freight, who has to organize customs formalities etc.

Thus Incoterms can make international trade easier but only if parties choose the Incoterm that allocates the cost, risk and formalities of the shipment correctly. This tool may provide some guidance to choose the ‘right’ Incoterm.