What are incoterms – and why it’s important for producers to know

Many Australian producers have fallen into the trap of trying to export products themselves, only to trip up on aspects like Packing costs, Wharfage, and Export customs.

These terms can become a producer’s nightmare as they sound needlessly complicated and jargon-filled.

The sight of these words may make your eyes glaze over and your heart skip a bit (but not in a good way).

So before you start shipping your product off to China, you need to know a special word that can help you alleviate some of the pain of the red-tape trap that you will find yourself in without any export guidance.

Introducing, incoterms.

Incoterms are the international rules for the interpretation of trade terms. Incoterms make international trade easier and help traders in different countries to understand one another.

These standard trade definitions that are most commonly used in international contracts are protected by ICC copyright.

To assist traders to understand the areas that the 11 Incoterms cover and how each one works, the official ICC website now publishes the Preambles to each term in read-only format, together with basic information and background.

The Preambles do not spell out the obligations of buyer and seller, which are essential for correct use of Incoterms. This information may be obtained by consulting the full published texts of the 11 Incoterms, available online from ICC Publishing.

Alternatively see our quick reference guide provided kindly by MPW Supply Chain Consultancy.

Exporting your product need not be the headache you may expect it to be. With our extensive experience in exporting products and partners within the Asian region, we can get your product to the right overseas markets without the red tape holding you back.