Incoterms

INCOTERMS
Introduction
Overview: International Shipments
The shipment of 1,300 metric tons of wheat would first travel by train (an entire train-load of 26 railcars, each
weighing 50 tons) from the agricultural cooperative in Pithiviers to the Port of Rouen, France (an inland port on
the Seine River) where it would be mixed with a number of other loads of wheat and loaded onto a bulk shipgoing to Lagos, Nigeria. The entire shipment would then be unloaded and then delivered to a
wholesaler/distributor in Lagos. Such a shipment is called a bulk shipment.
The shipment of 1 box, weighing 50 metric tons, would first travel by special truck to a barge on the Rhine river
to Rotterdam, the Netherlands. The box would then be loaded onto a general-merchandise ship bound for
Paranagua,Brazil. It would then be unloaded, and reloaded onto a flat-bed railroad car. It would then travel to
Curitiba, Brazil, where it would be unloaded onto a truck, and transported to its final destination. Such a
shipment is called a break-bulk shipment.
The shipment of three boxes of computer boards would be delivered by the seller to a small-package company,
which would then take the boxes bytruck to Los Angeles, California. The boxes would then travel by air to
Anchorage, Alaska, where they would be reloaded onto a cargo airplane going to Beijing. Finally, the boxes
would be delivered by city truck to their final destination. Such a shipment is called a small package shipment.Copyright (c) 2008 Accenture. All rights reserved. You may only use and print one copy of this document for private study in connection with your 
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Negotiating the Costs of InternationalTransportation
For each international shipment, the exporter and the importer have to agree on several issues: the currency
used for the transaction, the method of payment, and the way the goods will be transported from the exporter’s
plant to the importer’s facility.
As far as the transportation of the goods is concerned, the exporter and the importer have to decide who pays
(and who arranges) foreach of the following items:
Export packaging
Packaging goods for international travel takes greater effort and care than for domestic shipments. The perils to
which the goods are exposed are many, and the probability of damage is higher.
Export clearance
For many countries, including the United States, there are restrictions on what can be exported, and a
sometimes convoluted process of exportclearance must be followed.
Paperwork
Each international transaction generates a lot of paperwork, from specific international invoices to bills of lading,
certificates of origin, certificates of inspection, and other requirements. Most international documents have about
10 different documents, in multiple copies.
Inland transportation (exporter)
Inland transportation to the port ofdeparture or to the city where the international air transport will start is similar
to the transportation of a domestic shipment.
Loading of the goods
Loading of the goods onto a ship, called stevedoring, can be relatively expensive.
International transportation
International transportation must be arranged with an international ocean carrier or an international air carrier
International InsuranceInternational insurance is often necessary, but the coverage can vary, depending on the value of the goods.
Unloading of the goods
Stevedoring in the port of destination may be included as part of the international transportation costs, or may
be billed separately.
Customs clearance
In many countries, the process of clearing Customs is complex and cumbersome.
Inland...