Choosing the Right Incoterm for Your Canadian Shipping Strategy
Ask any retailer that ships regularly to Canada what its top logistics and transportation priorities are and you’ll probably hear things like “reducing transit time” or “cutting costs,” you probably won’t hear anyone say: “Choosing the right Incoterm keeps me up at night.”
Most shippers have probably never even heard of Incoterms or maybe have only a very general understanding of the concept.
In fact though, Incoterms are a critical part of international commerce and an essential part of any international border clearance.
As this discussion will make clear, assigning the right Incoterm to a particular shipment is tremendously important for a number of reasons.
But what exactly is an Incoterm? Essentially, Incoterms set “the rules of the road” for international commerce and ensure that businesses all over the world abide by the same definitions and processes.
Incoterms carefully delineate responsibilities to buyers and sellers, and dictate each party’s obligations throughout the shipping process.
Because of Incoterms, buyers and sellers have a clear understanding of what constitutes “delivery,” for example, and which party is responsible for unloading a vehicle or who is liable for certain payments. This avoids costly mistakes and misunderstandings.
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