Incoterms are a pre-defined set of three letter codes created by the International Chamber of Commerce (ICC) which were established so there would be clear international commercial terms, as far as where costs and risks lie within each party (the buyer or the seller) when making an agreement in moving goods from the source to the destination, hopefully reducing issues within a supply chain.
Think of Incoterms as code words that are used within international trade that make it 100% clear where the buyers and sellers responsibilities lie, as far as the place of delivery, the division of cost and where the risk transfers to the buyer.
