Incoterm

An Incoterm (International Commercial Term) is a standardized trade term published by the International Chamber of Commerce (ICC) that defines the responsibilities of buyers and sellers in international transactions. Incoterms specify who pays for transport, insurance, and duties, and at what point risk transfers from seller to buyer. The current version, Incoterms 2020, includes 11 terms such as FOB, CIF, EXW, and DDP.

In Freight Forwarding

The Incoterm chosen for a shipment directly determines the freight forwarder's scope of work. Under FOB (Free On Board), the seller's responsibility ends once goods are loaded on the vessel, while under DDP (Delivered Duty Paid), the seller handles everything including destination customs and delivery. Forwarders must understand the agreed Incoterm to correctly quote services and allocate costs.

How CargoGen Handles It

CargoGen records the Incoterm on every shipment and commercial invoice, and the AI reads it off the invoice along with the parties and values. It appears on the generated bills of lading and invoices so every document agrees on who pays for what.