To be a forwarder must be familiar with foreign trade knowledge | Baitong Logistics
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To be a forwarder must be familiar with foreign trade knowledge

Jan 05,2022

FOB (Free On Board...
named Port of shipment)

Free on Board (FOB) The seller delivers the goods on a vessel named by the buyer at the agreed port of shipment.
According to the International Chamber of Commerce's interpretation of FOB:

Basic obligations of the Seller:

(1) Complete export customs clearance formalities and bear all costs and risks incurred in transporting the goods to the rail of the vessel at the port of shipment.
(2) Shipment of the goods on board the vessel nominated by the Buyer at the agreed time of shipment and at the port of shipment, in accordance with the usual port practices, and notice of shipment to the Buyer.
(3) Submit the agreed documents or the corresponding electronic information (EDI) to the Buyer.

Basic Obligations of the Buyer:

(1) Charter the vessel to pick up the goods at the agreed port of shipment on time, pay the freight, and inform the Seller of the name of the vessel and the date of loading at the port.
(2) bear all expenses incurred when the goods pass the ship's rail at the port of shipment and all risks of loss or damage to the goods.
(3) Receive documents or corresponding electronic information and pay the loan as stipulated in the contract.

A variation of FOB terminology

(1)FOB Liner Terms refer to shipping charges on a Liner basis, that is, the seller does not bear the shipping charges, but does not mean that the goods concluded on a FOB basis must be shipped on a Liner Liner. As to who bears the shipping charges, it depends on the Terms of charter adopted by the buyer.
The Seller shall only deliver the goods within the reach of the hook of the vessel designated by the Buyer. The Seller shall not bear the subsequent loading expenses.
In order to ensure proper placement and distribution of the cargo on board, the cargo shall be Stowed and arranged after loading on board. This is called stowing and the Seller shall bear the stowing fee.
After shipment, bulk cargo loaded into the ship needs to be Trimmed and Trimmed, that is, Trimmed, at the seller's expense, in order to maintain balance of pressure and navigation safety.

CFR(Cost and Freight... 
named port of destination)

Cost and freight means the seller must bear the cost and freight of transporting the goods to the agreed port of destination.

Basic obligations of the Seller:

(1) Provide the contracted goods, charter a vessel and book the shipping space and pay the freight, load the goods on time at the port of shipment, and give the buyer full notice of the shipment after loading.
(2) Go through the formalities of export customs clearance and bear all risks until the goods reach the ship's rail at the port of shipment and the expenses of delivering the goods to the ship at the port of shipment.
(3) Provide relevant documents or relevant electronic information as stipulated in the contract.

Basic Obligations of the Buyer:

(1) assume the risk of loss of or damage to the goods from the time they cross the ship's rail at the port of shipment and any additional costs arising from events occurring after the goods have been loaded on board.
(2) To take delivery of the goods at the destination port specified in the contract, complete import customs clearance procedures and pay import duties.
(3) Receive the documents or the corresponding electronic information provided by the seller, and pay according to the provisions of the contract.

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