Language is one of the most complex and important tools of international trade. As in any business, small changes in wording can have a big impact on all aspects of a trade agreement. Words definitions often differ from one sector to another. This is especially true in world trade.
Key phrases such as “delivery” can have a very different meaning in regard to the business world. For business terminology to be effective, there must be phrases that mean the same across the industry. That is the main reason why the International Chamber of Commerce (ICC) created “INCOTERMS” in 1936.
INCOTERMS are designed to create a bridge between the different members of the industry, acting as a uniform language they can use. Each INCOTERM refers to a type of agreement for the purchase and transport of goods in an internal enviroment. There are 13 different terms, each of which helps users deal with different situations involving the movement of goods.
An incoterm represents a universal term for a transaction between importer and exporter, so that both parties understand the tasks, costs, risks and responsibilities, as well as logistics management and transportation from the product outlet until receipt by the importing country .
ICC (International Chamber of Commerce or ICC: ) has been responsible since 1936 (with revisions in 1945, 1953, 1967, 1976, 1980, 1990, 2000 and 2010) for the development and updating of these terms, according to the changes of international trade. Currently Incoterms 2010 (from January 1, 2011), without this meaning that earlier versions have ceased to be used. Hence, the need to point the Incoterm and year of release.