EXW, FOB or FCA? Choosing the Right INCOTERM and Why it Matters to Maritime Shippers
Drew Stapleton et al.
What the paper says
International commercial terms, or INCOTERMS, are three-letter standardized terms commonly used in international contracts for the sale of goods. Even though the International Chamber of Commerce (ICC) has clarified which terms are meant to be used for maritime intermodal shipping transactions, many terms are misused. This leaves shippers vulnerable and with less control over their supply chains. The authors present a brief historical background on shipping terms, then explain changes made from INCOTERMS 2000 to INCOTERMS 2010. They consider in particular the term FOB - Free on Board, which is often misused and does not apply to multimodal sea containerized transportation. They discuss the use of EXW - EX-Works and FCA - Free Carrier At in order to mitigate risk. The authors review some of the inconsistencies in use of INCOTERMS by banking institutions, and offer suggestions for further research relating to INCOTERMS and risk management.
9 citations
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.41 × 0.4 = 0.16 |
| M · momentum | 0.70 × 0.15 = 0.10 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.