‘Incoterms’ has become a stock term in the international freight world. In fact it is a word that is copyrighted by the International Chamber of Commerce (ICC). Following some years of discussion and drafting within the ICC, they issued the first International Commercial Terms (Inco terms) in 1936. There have been 5 revisions since then, up to the latest – Incoterms 2010.
What is meant by Incoterms is a set of rules governing the distinct types of transportation around the World. It codifies what is meant by each of the (currently) 11 identified and generally accepted types of freight transaction that can be used between sender and recipient. It helps them to understand who owns the goods at each stage, who is responsible in each case for the actual task of shipping, who pays for the various cost elements, and who bears the associated risks (i.e. who pays in the event of damage or loss, at a given point).
The United Nations Commission on International Trade Law (UNICTRAL) recognises these terms as being the global standard for transportation; and they are available in 31 languages through ICC.
It should be noted that the parties to a shipping transaction may agree between themselves to use a previous version, most likely the immediate predecessor, Incoterms 2000. The vast majority of trade, however, is being done using Incoterms 2010.