Incoterms - Global Supply Chain Management SCM 475 Terms of...

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Global Supply Chain Management SCM 475 Terms of Trade or Incoterms
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International Commerce Terms Understanding Incoterms Overview of all 13 Incoterms Electronic Data Interchange Common Errors in Incoterms Incoterms as a Marketing Tool
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International Commerce Terms In 1936, the International Chamber of Commerce developed the  International Commerce Terms (or  Incoterms ) that formalize  these responsibilities. Incoterms were revised in 1953, 1967,  1980, and 1990. The latest version of Incoterms is dated 2010.  For each international sale, it is important to determine, who —  the exporter or the importer — is responsible for: Domestic transportation in the exporting country International transportation Domestic transportation in the importing country The risks involved in international transportation Customs clearance in the importing country
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Understanding Incoterms Incoterms formally define the following aspects of an  international sale: Who performs the task? Who pays for the activities? When the transfer of ownership takes place? Who bears the liability of the goods? There are 11 different Incoterms, all abbreviated with a 3-letter  acronym, such as EXW, DEQ, FOB, and so on.
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Understanding Incoterms Choosing the correct Incoterm depends on which export  strategy a company is following. The following factors are  particularly important: The type of product being sold (weight, volume,  perishability, value, sensitivity to temperature changes,  and so on) The method of shipment The ability and willingness of either of the exporter and  importer to perform the tasks involved The amount of trust placed by either of the parties toward  the other
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Eleven Incoterms
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Eleven Incoterms Every Incoterm has: A scope — The type of products for which it can be used A modality — The mode of transport for which it can be used A syntax — The way it has to be stated on invoices and  paperwork Every Incoterm defines: The responsibilities of the exporter The responsibilities of the importer A specific transfer point at which the responsibilities for the  goods shifts from the exporter to the importer
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EXW [City where goods are made available] Syntax Ex-Works (EXW) The exporter has to make the goods available to the importer at a  point located in the exporting country, at a mutually-convenient time. EXW can be used for any type of goods Scope Modality EXW can be used for all modes of transportation
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Ex-Works (EXW) packages the goods for the international voyage provides the importer with the documents necessary to clear  Customs  Exporter Importer  does everything  else Transfer Point  when the exporter makes the goods available to the  importer
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