diff --git a/erpnext/patches.txt b/erpnext/patches.txt
index 2624181c196..1ca3be96b11 100644
--- a/erpnext/patches.txt
+++ b/erpnext/patches.txt
@@ -318,3 +318,4 @@ erpnext.patches.v14_0.migrate_remarks_from_gl_to_payment_ledger
 erpnext.patches.v13_0.update_schedule_type_in_loans
 erpnext.patches.v14_0.create_accounting_dimensions_for_asset_capitalization
 erpnext.patches.v14_0.update_tds_fields
+erpnext.patches.v14_0.create_incoterms_and_migrate_shipment
diff --git a/erpnext/patches/v14_0/create_incoterms_and_migrate_shipment.py b/erpnext/patches/v14_0/create_incoterms_and_migrate_shipment.py
new file mode 100644
index 00000000000..fd3c071edbe
--- /dev/null
+++ b/erpnext/patches/v14_0/create_incoterms_and_migrate_shipment.py
@@ -0,0 +1,32 @@
+import frappe
+
+from erpnext.setup.doctype.incoterm.incoterm import create_incoterms
+
+
+def execute():
+	create_incoterms()
+	migrate_shipments()
+
+
+def migrate_shipments():
+	if not frappe.db.count("Shipment"):
+		return
+
+	OLD_VALUES = [
+		# old_value: (code, title),
+		"EXW (Ex Works)",
+		"FCA (Free Carrier)",
+		"FOB (Free On Board)",
+		"FAS (Free Alongside Ship)",
+		"CPT (Carriage Paid To)",
+		"CIP (Carriage and Insurance Paid to)",
+		"CFR (Cost and Freight)",
+		"DPU (Delivered At Place Unloaded)",
+		"DAP (Delivered At Place)",
+		"DDP (Delivered Duty Paid)",
+	]
+	shipment = frappe.qb.DocType("Shipment")
+	for old_value in OLD_VALUES:
+		frappe.qb.update(shipment).set(shipment.incoterm, old_value[:3]).where(
+			shipment.incoterm == old_value
+		).run()
diff --git a/erpnext/stock/doctype/shipment/shipment.json b/erpnext/stock/doctype/shipment/shipment.json
index a33cbc288c5..53b549deec1 100644
--- a/erpnext/stock/doctype/shipment/shipment.json
+++ b/erpnext/stock/doctype/shipment/shipment.json
@@ -412,9 +412,9 @@
   },
   {
    "fieldname": "incoterm",
-   "fieldtype": "Select",
+   "fieldtype": "Link",
    "label": "Incoterm",
-   "options": "EXW (Ex Works)\nFCA (Free Carrier)\nCPT (Carriage Paid To)\nCIP (Carriage and Insurance Paid to)\nDPU (Delivered At Place Unloaded)\nDAP (Delivered At Place)\nDDP (Delivered Duty Paid)"
+   "options": "Incoterm"
   },
   {
    "fieldname": "shipment_delivery_note",
@@ -433,10 +433,11 @@
  ],
  "is_submittable": 1,
  "links": [],
- "modified": "2021-04-13 17:14:18.181818",
+ "modified": "2022-11-17 17:23:27.025802",
  "modified_by": "Administrator",
  "module": "Stock",
  "name": "Shipment",
+ "naming_rule": "Expression (old style)",
  "owner": "Administrator",
  "permissions": [
   {
@@ -470,5 +471,6 @@
  ],
  "sort_field": "modified",
  "sort_order": "DESC",
+ "states": [],
  "track_changes": 1
-}
+}
\ No newline at end of file