The Importance of Incoterms in International Transport Management

The International Commercial Terms or Inconterms, established by the International Chamber of Commerce in 1936, are acronyms containing contractual rules whose inclusion in the contract of sale and purchase guarantees the parties on the nature and discipline of the contractual relationship. The main purpose of the Incoterms rules is to define the mutual roles, duties, responsibilities and transfer of risks. Their advantage is comprehensibility and uniform interpretation between the contracting parties. The aim of this thesis is to analyze the nature of Incoterms through a look at the history and developments to more detailed operational analysis. The focus is therefore on the historical and operational analysis of Incoterms rules in order to demonstrate how effective they are in drawing a set of uniform rules in international trade. The study and development of this topic are the result of an educational experience at the University of Modena and Reggio Emilia. Furthermore, my particular interest in this topic stems from my work experience in the After Sales Department at F.B.L. Food Machinery S.R.L. Firstly, I will introduce the Incoterms from a historical perspective to reveal its evolution over time. Secondly, I will discuss the operational activity in which Incoterms are implemented. Finally, to better explain the data collected, I will bring cases under scrutiny taken from my work experience (examples of international shipments based on customers’ contracts) which contribute to confirm the objective of my paper, i.e. to highlight the importance of Incoterms in International Trade and International Transport Management.