No location found for incoterm location &1 on item &2

What causes this issue?

No location found for incoterm location on item level

System Response

The system is configured to require that you specify a location for an
incoterm. You have specified an incoterm location that has no location
assignment.

How to fix this error?

Change the incoterm location in one of the following ways:
Change the incoterm location or assign a location to the incoterm
location via transaction <AB>/SCMTMS/INCLOC_MAP</>.
Assign a location via the FIORI Launchpad using the <ZK>Assign Location
to Incoterm Location</> app.
Alternatively, you can Change the Customizing setting. If a location is
not needed for this incoterm, you can deactivate the incoterm location
check using
<DS:SIMG./SCMTMS/V_TINC>Define Incoterms.</>

Procedure for System Administrators

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

Error message extract from SAP system. Copyright SAP SE.