Title: An exploratory study of Incoterms^® knowledge and effective use in trade

Authors: John Vogt; Jonathan Davis

Addresses: Marilyn Davies College of Business, University of Houston-Downtown, 320 N Main Street, Houston, TX, 77002, USA ' Marilyn Davies College of Business, University of Houston-Downtown, 320 N Main Street, Houston, TX, 77002, USA

Abstract: The research focuses on the usage of the Incoterms^® rules in practice, whether they are correctly understood and appropriately employed, how fast companies are adopting the newest version of Incoterms^® and by which parts of the organisation. The results indicate broad awareness but only measured adoption of Incoterms^® 2020, and significant and pervasive misuses and misunderstandings of the Incoterms^® rules. The Incoterms^® rules are international trade terms that define the obligations, roles and responsibilities, the risks and the costs assumed by the seller and buyer organisations in the trade transaction. These provide clarity to the buyer-seller organisation to make the trade efficient and effective. Poorly utilised or defined rules can leave one or both parties with unplanned obligations, risks, costs, and inefficiencies. The lack of formal training in Incoterms^® rules, plus the large number of functions involved, increases the use of incorrect or inappropriate Incoterms^® rules.

Keywords: trade; Incoterms^®; logistics; buyer-seller relationship; supply chains; global markets.

DOI: 10.1504/IJTGM.2024.137743

International Journal of Trade and Global Markets, 2024 Vol.19 No.2, pp.193 - 212

Received: 30 Mar 2022
Accepted: 13 Feb 2023
Published online: 04 Apr 2024 *

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