Development aimed at fostering smoother international trade, the Nigerian Shippers’ Council (NSC) and the International Chamber of Commerce (ICC) Nigeria have issued a crucial warning to stakeholders in the maritime and trade sectors: avoid the misuse of International Commercial Terms, popularly known as Incoterms. Incorrect application of these globally recognised trade rules has been identified as a significant contributor to avoidable disputes in cross-border transactions.

Understanding Incoterms and Their Importance

Incoterms are a set of predefined commercial terms published by the ICC, designed to clarify the responsibilities of buyers and sellers in international trade. These rules specify who bears costs, risks, and obligations at different stages of the delivery process—from the seller’s premises to the buyer’s destination. Proper understanding and application of Incoterms are essential for safeguarding smooth transactions and minimizing misunderstandings.

The Risks of Misusing Incoterms

Highlighting the significance of correct usage, Ms. Adaora Nwonu, Deputy Director of Trade Services at the NSC, pointed out that many trade disputes arise from the wrong application of Incoterms. She emphasised that such misunderstandings frequently lead to disagreements that could have been easily avoided with adequate knowledge and proper implementation.

Dr. Pius Akutah, Executive Secretary of the Nigerian Shippers’ Council, articulated the Council’s mandate to educate stakeholders on trade rules, conventions, and policies. He stressed that the Council’s efforts aim to reduce disputes and promote a more efficient maritime trading environment.

Collaboration for Better Trade Outcomes

The partnership between the NSC and ICC Nigeria is pivotal in leveraging specialised ICC committees—covering areas like trade, banking, and legal matters—to support fair dispute resolution and capacity building. Dr. Akutah remarked, “If you use the wrong Incoterms, it results in more disputes. That’s not what we want. The Shippers’ Council would rather spend its time developing innovative solutions than resolving disputes that could have been avoided.”

He also emphasised the need to strengthen Nigeria’s logistics infrastructure to fully benefit from global trade agreements. Improving logistics performance will enable Nigeria to maximise the advantages of new trade conventions and foster sustainable growth in the maritime sector.

Ensuring Nigeria’s Compliance with Global Standards

Mrs. Olubunmi Osuntuyi, Secretary-General of ICC Nigeria, underscored the importance of strategic collaboration in aligning Nigeria’s trade practices with international standards. She highlighted that Incoterms 2020 remains the internationally accepted framework facilitating clarity around responsibilities in trade contracts.

She commended the Nigerian Shippers’ Council for its ongoing training initiatives and collaborative efforts to enhance stakeholders’ understanding of Incoterms. Despite security challenges hindering regional outreach, the partnership continues to equip Nigerian trade practitioners with vital tools for effective participation in global commerce.

The call by the Nigerian Shippers’ Council and ICC Nigeria reiterates a fundamental principle in international trade: clarity and accurate application of Incoterms are vital to reducing disputes, minimising costs, and promoting a resilient trade environment. As Nigeria aims to position itself competitively on the global stage, adherence to these standards and continuous capacity building remain key drivers of sustainable growth.