Page 49 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

International Trade Procedures and Documentation

Notes has to take care of all such implications involved in the importer country’s rules and
regulations.
8. Standard practices of country or region: Some countries and regions have certain standard
incoterm practices in place. For example; many European countries prefer goods to be
delivered to the destination country by the exporter. The exporter is at risk under such
incoterms practices.
9. Mode of transport: Certain incoterms are used for sea transport only and some other for
multi-modal transport, including inland transport. The exporter shall take care of such
incoterms while incorporating them in the international sales contract or quoting export
prices in pro forma invoice.
10. Avail all information in execution of your obligations and responsibilities: The exporter
must have all the information about the rules and regulations regulating export and
import such as what items fall under restricted or prohibited category and then negotiate
the incoterms. For example, an exporter has agreed to deliver the goods on DDP terms.
Once the goods have arrived in the destination country, the customs department of the
importer country may refuse to allow the entry of the goods if those goods fall under the
prohibited list and a special license is required to import them. Now, the exporter will be
in a problem as the importer does not have a special import license and the former has
spent a lot of money on carrying the goods to the importer’s country. Thus, all such
information pertaining to the use of incoterms must be collected and analysed first-hand
by the exporter himself.
11. Offering competitive incoterms for retaining satisfied importers: The exporter should
choose incoterm that offer the most competitive price to the importer. He should consult
the importer and enquire what kind of incoterms would be convenient to retain satisfied
importers. It would be wrong and unwise on the part of an exporter to offer the easiest
terms at his own end to the importer, because it may not be suitable for his importer. It is
well said that “if customer is a king then pricing is a queen”. Just like a king is attracted
towards a queen, an importer too looks for affordable and suitable prices and the product
to be delivered at his convenience. Studying the concept of market mix whereby producer
takes care of four Ps – Product Price, Place, Promotion through customer choice expressed
as Customer Solution for product, Cost for Price, Convenience for Place and
Communication for Promotion can be an eye-opener for an exporter in choosing
competitive incoterms and retaining satisfied importers.

Task Why was there a need for the revision of Incoterms?

Self Assessment

Fill in the blanks:
11. ...........................helps the exporter and importer to divide the individual responsibilities
and obligations of the trade deal.

12. Incoterms must provide clarity and ........................in the trade transactions, particularly
when being incorporated in international sales contracts
13. ............................. Incoterms indicate that the goods shall be made available to the importer
at the exporter’s premises.

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