When we talk about INCOTERMS we refer to the “International Trade Terms”, a set of 11 rules that define responsible parties at each stage of an international transaction, as defined by the International Chamber of Commerce, in charge of the preparation and regular review of these terms, since 1936.
Incoterms are reproduced in the form of three initial letters each, seeking to universalize these codes, a bit like the flags of the International Code of Maritime Signals used by ships to communicate.
Its function is to provide a regulatory framework between commercial parties, of voluntary acceptance, in any type of international merchandise sale contract, regarding the delivery conditions of the merchandise, clarifying and unifying cost criteria and responsibilities between buyer and seller.
Currently they are an exclusive requirement in any commercial invoice, with the aim of reducing the risks of misunderstandings or different interpretations, something that in logistics can impact large economic losses for the parties involved.
How does a process where Incoterms are involved work and what things must be taken into account when working with a logistics business partner? We spoke with Estefanía Sisatzky SVP Ops and Customer Service from Aerodoc, to talk about its use and the opportunities it generated in this context of a pandemic.
What changed in the incoterms in 2020 and why was this change made?
In 2020 there was a change in two Incoterms, with the aim of simplifying processes and detailing what each one included, as well as unifying differentials that existed between the maritime and airline industries, which are no longer distinguished in that way. In addition, the International Chamber of Commerce included Australia and China in the Drafting Group, the table that defines, writes and updates Incoterms, which historically used to be made up of mostly European members.
What difficulties can a client have if he does not comply with these incoterms?
In general, not complying with an Incoterms is basically violating a commercial agreement between parties (seller and buyer) that, beyond being defined by global regulations, is still an unfulfilled agreement between private parties.
How do Incoterms work in the importer of record logistics industry?
IOR is not considered within Incoterms as a process, but they allow us to quote the service and cover all your needs. That is why when someone hires Aerodoc Delivery Duty Paid (DDP) with IOR services, we add the end-to-end comprehensive service, including the Aerodoc import license. As a value differential, we name our services as the acronym of Incoterms to facilitate the understanding of potential clients and business partners.
Does Aerodoc operate in any way differential with Incoterms with its clients?
At Aerodoc we offer a consulting service prior to hiring since in the industry many Incoterms terms are misused or misunderstood, due to minimal differences between one and the other, or due to some characteristics of the incoterm to be used, which the client prefers not to. use (the upload to transport, insurance, etc.), always with the aim of achieving the highest added value for our client and accompanying them in the best operational design according to the Incoterm that leads their operation.
If you are interested in learning more about Aerodoc and the advantages of being business partners, we invite you to talk
