Article Title

Refining shippers’ dyadic cost, risk, and delivery responsibilities: The principal changes to INCOTERMS and a transaction cost focus for the future

Authors

Drew M. Stapleton, University of Wisconsin La CrosseFollow
Vivek Pande, University of Wisconsin La CrosseFollow
Soumen Ghosh, Tennessee State UniversityFollow
Uzay Damali, University of VictoriaFollow

Abstract

We first explore the changes in the latest version of Incoterms and explain why and how they have been refined to better capture contemporary global and domestic shipping practices and policies. Next we graphically explain each of the eleven INCOTERMS 2010 and specify exact delivery points, those critical points at which cost and risk responsibilities shift from the Seller to the Buyer. We then provide a discussion to better explain the application of the terms from a practitioner’s view and note that many shippers and freight forwarders still revert to long practiced shipping policies, leaving themselves vulnerable. We close by proposing future researchers build an expert system grounded primarily in Transaction Cost Economics with mechanisms from Game Theory in an attempt to better guide trading partners in using appropriate Incoterms.

Recommended Citation

Stapleton, Drew M., Pande, Vivek, Ghosh, Soumen, & Damali, Uzay. (2014). Refining shippers’ dyadic cost, risk, and delivery responsibilities: The principal changes to INCOTERMS and a transaction cost focus for the future. Journal of Transportation Management, 24(2), 7-29. doi: 10.22237/jotm/1388534520

DOI

10.22237/jotm/1388534520