Decoding International Commercial Terms (Incoterms) Selection Mechanisms: Importers' Strategic Preferences in Global Trade
Year: 2026
Type: article
Abstract: In today's globalized world, achieving a competitive advantage in international trade carries paramount importance, while International Commercial Terms (Incoterms) reflect the bargaining power of the parties involved in international trade. Selecting appropriate Incoterms may significantly impact the competitiveness of the parties. Hence, this study aims to identify the influential factors driving importers' decision-making process in selecting Incoterms for international business. The initial list of influential factors was developed through an extensive literature review and finalized after a semi-structured interview with selected importers. The Best Worst Method (BWM), a multi-criteria decision-making (MCDM) technique, is utilized to determine the relative significance of the factors, and data have been gathered through surveys and interviews. The study has found 20 influential factors under five principal factors, including operation, cost and risk, transportation, knowledge and comprehension of Incoterms, and business and industry environment. The results of the study revealed that "cost and risk" is the most significant factor among the five principal factors. These findings underscore the significance of cost minimization in the process of selecting Incoterms to achieve effective outcomes in international trade. Additionally, this research contributes to a better understanding of the key variables influencing importers' strategic choices concerning Incoterms. By shedding light on the decision-making process and factors involved, this study provides valuable insights to aid importers in making informed choices for successful global trade activities.
Institution: Bangladesh Maritime University
Language: English
Subfield: Law
Field: Social Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7204193638