On the operations desk, the agreed Incoterm tells a freight forwarder which party books the carriage, who insures the cargo, who handles export and import customs formalities, and where along the journey responsibility shifts, so quoting, booking, and documentation all follow from it. The decision the term drives is how to structure and price the shipment, because each rule splits the obligations and the cost burden differently. The line to draw is that Incoterms govern delivery, risk, cost, and clearance only; they do not set the price, the payment terms, or the transfer of ownership and title, which the sales contract governs separately. There are eleven rules, some usable for any mode of transport and some only for sea and inland-waterway transport.
Glossary
Incoterms
Incoterms are a set of standardised international trade terms published by the International Chamber of Commerce that allocate, between seller and buyer in a contract of sale, who arranges and pays for carriage and insurance, who clears the goods for export and import, and the point at which risk of loss or damage passes from seller to buyer.