Incoterms (International Commercial Terms) are standardized rules that help shipping and trade professionals clearly communicate who is responsible for what during international shipments. Think of them as a universal shipping language that prevents misunderstandings about who pays for transport, who handles customs, and when the ownership of goods transfers from seller to buyer. Common examples include FOB (Free On Board) and CIF (Cost, Insurance, and Freight). These terms are like a shipping contract checklist that everyone in global trade agrees to use, making it easier to do business across borders.
Managed international shipments using Incoterms 2020 rules for 50+ global clients
Trained staff on Incoterms and International Commercial Terms compliance
Reduced shipping disputes by 40% through proper Incoterms implementation
Typical job title: "Shipping Coordinators"
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Q: How would you handle a dispute between a buyer and seller regarding damaged goods under different Incoterms rules?
Expected Answer: Should demonstrate understanding of risk transfer points under different Incoterms and explain how to use documentation to determine responsibility. Should mention insurance requirements and claim procedures.
Q: How do you choose the most appropriate Incoterm for different business situations?
Expected Answer: Should explain how to balance factors like shipping costs, risk management, and customer requirements. Should discuss considering company size, shipping volume, and destination country requirements.
Q: What's the difference between FOB and CIF terms?
Expected Answer: Should explain that FOB means the seller is responsible until goods are on the ship, while CIF means seller also pays for insurance and freight to destination port. Should give practical examples.
Q: How do Incoterms affect shipping documentation?
Expected Answer: Should discuss how different terms require different paperwork, such as bills of lading, insurance certificates, and export/import documentation.
Q: What are Incoterms and why are they important?
Expected Answer: Should explain that Incoterms are standardized international shipping terms that define responsibilities between buyers and sellers for costs, risks, and tasks in global trade.
Q: Name three commonly used Incoterms and their basic meanings.
Expected Answer: Should be able to explain basic terms like EXW (Ex Works), FOB (Free on Board), and CIF (Cost, Insurance, and Freight) in simple terms.