Freight forwarding, as a specialized economic activity, plays a crucial role in the transportation industry by assisting companies in streamlining the shipping process. Importing and exporting can quickly become costly and time-consuming for manufacturers with bulk shipping needs, while freight forwarders help traders reduce costs and enhance operational efficiency. The forwarding contract is a named contract under Croatian legislation, governed by the Civil Obligations Act. In 1936, the International Chamber of Commerce developed the Incoterms, an established and internationally accepted set of rules in contracts for the sale and shipment of goods worldwide. The Incoterms rules determine which party bears the costs at each stage of the global transportation process and define the responsibilities of each party during every phase of shipping. This paper places particular legal focus on the Incoterms rules, which are not based on statutory law but on internationally recognized commercial customs that contracting parties incorporate into their agreements. The rules delineate the allocation of responsibilities, costs, and risks between sellers and buyers, facilitating contract formation and the resolution of potential disputes. The Incoterms rules encompass essential aspects such as transportation organization, customs formalities, risk transfer, and cargo insurance. Their legal nature positions them as part of "soft law," meaning they hold binding force only when expressly agreed upon by the parties. The paper presents an analysis of the application of Incoterms rules through examples of case law and examines the latest version, Incoterms 2020, which introduces modernizations reflecting global changes in trade practices. In conclusion, it emphasizes the importance of legal precision in incorporating these rules into contracts to ensure legal certainty and mitigate risks in international commercial transactions.