Global Sourcing — The Incoterm Basics

One of the biggest surprises for me in the global sourcing world these past few years is how few organizations have managed to integrate their global trade and customs / brokerage teams with their global sourcing organization -- and vice versa. Logistics, tax, tariff, customs and other related trade issues can easily end up costing the original projected savings of working with a new locale in the first place -- especially when handled by an inexperienced sourcing team. If you want to learn more about the global trade function, a great place to start is memorizing Incoterms. A recent blog post from Source Juice explains a bunch of the nuances and intricacies. According to Source Juice, an Incoterm "defines the monetary transaction and role responsibilities for both sides of the international trading buyer and seller transaction. The purpose of standardized incoterms is to determine export and import clearance responsibilities, who is owning the risk for the condition of the products at each stage in the transport process, and who is responsible for paying for what."

- Jason Busch

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