The Impact of Using Incoterms on Supply Chain Management Flexibility

Abstract

Purpose: This paper investigates the factors influencing the utilization of International Commercial Terms and the impact on supply chain management (SCM) flexibility from Incoterms utilization. Research design, data, and methodology: This paper utilizes a triple approach combining knowledge-based theory, relational contract theory, and power and dependence theory. For this study, questionnaires were distributed to examine the factors influencing the use of Incoterms and to analyze their causal relationships. Results: The findings reveal that differences in understanding Incoterms, mutual cooperativeness, and bargaining power all influence the effective utilization of Incoterms. Furthermore, a positive relationship between Incoterms utilization and SCM flexibility is observed. Conclusions: This paper enhances understanding of how using Incoterms affects supply chain management flexibility. It also offers valuable insights into the factors that influence the adoption and use of Incoterms, as well as strategies for enhancing SCM flexibility in international trade.