Shipping and Incoterms

Export transactions involve shipping products from the exporter’s factory to a nearby seaport or airport. From there they travel by ship or airplane to a foreign port and are then transferred to land-based transportation and delivered to the customer. Some shipments to bordering countries are transported entirely overland by rail or truck. Exporters incur transportation costs and carry insurance against damage or loss during transit.

In the past, disputes sometimes arose over who should pay the cost of freight and insurance in international transactions, the foreign buyer or the seller (that is, the exporter). To eliminate such disputes, the International Chamber of Commerce (www.iccwbo.org) developed a system of universal, ...

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