In this concise instructional video recorded at Brussels Central Train Station, Zach Selch explains Incoterms—the standardized short codes that define the allocation of responsibilities, costs, and risks between buyers and sellers in international trade. He outlines their legal basis (originating in 1936, updated roughly every ten years, with the current 2010 version containing 11 terms) and emphasizes the need to use the latest version. Selch highlights the most commonly used terms for small, lightweight shipments—EXW (ex‑works), FOB (free on board), and CIF (cost, insurance, freight)—detailing what each covers (e.g., who loads the goods, who pays shipping, insurance, and duties). He contrasts these with terms suited for bulk commodities and different transport modes (container, air, sea, truck). The video stresses the practical importance of clarifying who handles paperwork, insurance, and duties, noting that misunderstandings can make or break deals. Selch advises viewers to consult up‑to‑date reference books, legal counsel, and experienced shippers rather than relying solely on his advice, and invites businesses ready to expand internationally to contact his services.
Chapters
Hi, I'm in the Brussels Central Train Station. Beautiful Art Deco train station, one of my favorite train stations in the world. I've been coming here for about 30 years. You can get anywhere from here. But I wanted to talk today about Incoterms. Incoterms, simply put, are the short codes that we use to designate the responsibilities and the costs to each party in international trade. The buyer, the seller, who is responsible for shipping, the cost of the goods, the cost of insurance, the labor duties, all that type of things. And we want to make this really clear in our agreements. That's why we have Incoterms. And they're legally sanctioned. They've been around since about 1936. They change every 10 years, more or less. So the ones we're using today were written in 2010. They're actually a little bit new to me because I was very comfortable with the previous set. And they changed. They went from 13 to 11 terms. There are 11 terms. What I'll tell you is most people end up using 3 or 4 depending on what they sell. Virtually everything I've sold has been relatively small, lightweight stuff. So I'm dealing with a couple of tons worth of material on pallets. The shipping costs are going to be very different and how it's going to It's always going to be containerized, air freight or sea freight, trucks, that kind of thing. And when you're dealing with, say, bulk, when you're dealing with commodities, you might use a totally different set of terms for the most part. So what are the things that I typically use? Well, ex-works means at the door of the factory, and that's very common. Free on board means I'm paying to put it on a vehicle someplace. Okay? And then typically CIF, which is everything. That's the cost all the way there, shipping, freight, everything but duties. Now some people, they'll ask— actually, there are 2 Incoterms that cover duties as well. And then there are a series of things that really go down to, well, who puts it on the truck? Do we leave it next to the truck? Do we put it on the truck? Who pays for the paperwork? All these different things. When you're selling something like a car, it's pretty simple. Somebody gives you money, you hand them the keys and the pink slip, and you're done. International trade, these paper issues, who owns it until a certain point, who insures it, who pays for the shipping, the duties, these things are really important and they can make and break your business. They can make and break your deal. So you have to be really clear about this. There are some good books on the market. You don't necessarily need one of the $60 books. There are some good $5 books on the market. But get a new one. Make sure it's the latest Incoterms because having one that's before 2010 doesn't help you at all. And frankly, when you're dealing with this, make sure your lawyer is aware of this and talk to a shipper. Don't take my word for it. But just, I wanted to make sure that you had a clear understanding of what this was and how it impacts your business. Remember, when you're ready to grow your international sales, reach out to us. We can help. When you decide it's time to grow your international sales, call us.
