What on earth do we mean when we say “Incoterms?”

The International Commercial Terms or Incoterms are pre-defined commercial terms published by the International Chamber of Commerce (ICC). These terms are generally used internationally in commercial transactions or Procurement processes.

These rules are accepted by governments and legal authorities worldwide for the interpretation of the most commonly used terms in international trade. Incoterms were created with the intention of reducing uncertainties that come from different interpretations of the rules in different countries.

“Incoterms” is a registered trademark of the ICC. The first set of Incoterm rules were created in 1936 and have since been updated eight times with the latest version being Incoterms 2010 – published January 1, 2011.

The short answer: Widely understood and accepted rules.