What tools do consultants use to guide decision-making in the areas of international trade and supply chain design?

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What tools do consultants use to guide decision-making in the areas of international trade and supply chain design?

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Themes

Incoterm, ICC International Chamber of Commerce, international trade, Supply Chain Management, Logistics - Transportation, risk management, customs clearance, TCO Total Cost of Ownership, FCA Free Carrier, DDP Delivered Duty Paid, risk prevention, trading agreements, contractual terms, customer satisfaction, cost optimisation, business performance

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Abstract
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Abstract

Given the complexity of international trade relations, a single language for the distribution of risk responsibility coordination and the distribution of costs, rights and obligations is required. [...]
The International Chamber of Commerce developed Incoterms to avoid confusion and reduce misunderstanding in international sales contracts; due to different legal systems, various cultural traditions, and levels of trust among the parties, Incoterms served to ensure the parties' understanding and adherence to the contract. [...]
In the current framework characterised by global competition, trading agreements have gone beyond being just administrative clauses and are now becoming strategic tools that condition the efficiency, competitiveness and international reach of a company.

Extract

[...] Davis, J., & Vogt, J. (2021). Incoterms® 2020 and Missed Opportunities for the Next Version. C?runtu, C., & L?p?du?i, M. L. (2010). Complex issues regarding the role and importance of internationally codified rules and Incoterms®. Petroleum-Gas University of Ploiesti Bulletin, Economic Sciences Series, 98-110. Constantinovits, M., & Vladár, Z. (2013). A terminológia rendszerez? elvének változása az INCOTERMS® tükrében. [...]

[...] But it also restricts the purchaser's visibility and control over transport and freight options, possibly adding a tiny bit to the total cost of ownership. DAP presents a balanced exchange: the seller is responsible for delivery to the buyer's country, and the buyer oversees customs duty and tax, while maintaining some control over delivery transparency. From a seller perspective, the best Incoterms to use are those that pass the risk as early as possible (Ex Works- EXW and Free Carrier- FCA). [...]

[...] Nevertheless, Incoterms are an indispensable tool for the current international trade. Their common language significantly increases legal certainty, reduces uncertainty and suspicion, and allows for effective negotiations between different legal systems. Incoterms clarify risks, costs, and responsibilities, thus furthering the stability, predictability, and effectiveness of global commerce (Sinay, 2025). Incoterms® 2020, released by the International Chamber of Commerce Inc., has been a part of historical evolution in standardized global commerce legislation. It consists of the identical set of 11 terms distinguished in the 2010 release, but the new system is updated not only in terms of the goals of the Incoterms system. [...]

[...] (2018) revolve around the following idea: the fit between contractual models-like Incoterms and logistics contracts-and a company's wider management goals is indeed crucial in order to guarantee consistency between strategic intentions and operational behaviors. When contractual choices are consistent with business strategy, it is easier for businesses to cope with complexity and to manage costs, risks and competition in a global supply chain environment. According to Marchet et al. (2016), logistics strategy is one of the foundations for internationalization. According to their work, logistics should not be considered as a single kind of operational area, but rather as a strategic axis that must evolve when the firm expands and position in foreign firms. [...]

[...] For example, in FOB, sellers' risks end when the goods are loaded on the vessel, while in DDP, sellers bear responsibility and the cost of the transport until the goods arrive at the buyer's location (Sinay, 2025). Nevertheless, companies are advised to choose and use Incoterms wisely to avoid costly mistakes. The wrong type such as FOB or CFR when they are applied to air or road freights can provoke legal and logistical dilemmas. The lack of certain places including the point of delivery or the transfer of risk under DAP or FCA may confuse fulfilment. Some firms and agencies do not want to differentiate between cost transfer and risk. [...]

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