When you’re shipping goods internationally, there are a few terms that you should recognize and understand. INCOTERMS are used in 31 different languages, and you can find them in sales contracts as well as letters of credit. Continue to find out what you need to know about INCO.

What It Is

INCOTERMS are property of the International Chamber of Commerce and can be broken down into 4 categories: E, F, C, and D terms. Each INCOTERM is a code represented by three letters and a location. E terms refer to situations where the buyer can access the goods at the seller’s premises, while F terms involve the seller delivering the goods to a carrier. With C terms, the exporter arranges the shipping of the goods but isn’t responsible for damage. When the seller is responsible for both cost and risk, D terms are used.

How It’s Used

Language is important when you’re making a deal, but things can get confusing when each party speaks a different one. INCOTERMS keep everyone on the same page and describe the nature of the transaction. You would use different INCOTERMS for different types of transportation. Some work for any kind of transportation, while others are only applicable to water transportation.

Why It’s Important

It’s crucial that you are as clear as possible when working on a deal that involves international shipping, INCOTERMS lay out the costs and risks in each transaction and define what each party is responsible for. These terms help keep both sides on the same page, and they help to ensure that the goods are delivered safely and efficiently.


Do you have questions about INCOTERMS and the terminology associated with it? You can always contact ILS or visit our website. At our shipping company, we are fortunate enough to work with some of the most qualified professionals in the industry. Feel free to give us a call at 1-800-ILS-9712 to learn more.