How do Incoterms affect the shipping line..??

Do Incoterms® really affect the shipping line..??  Short answer : No they don’t affect the shipping line.. Image for Incoterms

ICC (International Chamber of Commerce), defines Incoterms® as below :

The Incoterms® rules are an internationally recognized standard and are used worldwide in international and domestic contracts for the sale of goods. First published in 1936, Incoterms® rules provide internationally accepted definitions and rules of interpretation for most common commercial terms.

The rules have been developed and maintained by experts and practitioners brought together by ICC and have become the standard in international business rules setting. They help traders avoid costly misunderstandings by clarifying the tasks, costs and risks involved in the delivery of goods from sellers to buyers. Incoterms® rules are recognized by UNCITRAL as the global standard for the interpretation of the most common terms in foreign trade.

As you can see from the explanation above, the terms are mainly for use between the seller and buyer and no actual contractual obligation with the shipping line that will be carrying the cargo..

However, there are cases where clients ask the shipping line to quote (for example) “FOB Durban to CFR Shanghai”.. In such cases, the shipping line just needs to make sure that they understand and follow the requirements of the customer.. In this case,  the shipping line’s quote will only include the sea freight from Durban to Shanghai as the other costs are not for account of this particular client..

However, the shipping line needs to get clarity from the client as to who will be paying the local charges (Terminal Handling Charge, Agency charges etc) at both ends as it is not covered in the quote, but is something that the shipping line will incur and will need to recover from someone..

What did you think of the above article..?? Comment below..

3 comments on “How do Incoterms affect the shipping line..??

  1. Linh Mai says:

    Hello,
    Can u create a topic about Incoterms 2010, especially the “Incoterms for Sea and Inland Waterway Transport ” part? Is there any difference from Incoterms 2000?

    Best regards,
    Linh

  2. Stephen says:

    Hello Sir,

    Is CPT and CIF alomost same, I mean the charges involved for the seller .
    Please let me know

    Regards
    Stephen

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