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What expenses should the consignor (seller) bear in FOB terms by sea?

by:VIPUTRANS     2021-03-12
Anyone who is a freight forwarder should know the definition of FOB by sea, FOB (Free On Board), also known as 'Free On BoardThe buyer is responsible for dispatching the ship to receive the goods, and the seller is responsible for transporting the goods to the ship. This series of transportation operations will definitely involve a lot of cost issues. So, what expenses should the shipper (seller Shipper) bear in FOB terms? Today, the editor will tell you about those things about FOB by sea. We take export goods as the case. Generally speaking, one shipment of seaborne export goods will incur three major costs from the domestic departure place to the foreign destination: 1. The local cost of the port of departure includes the port of departure including customs declaration fees and delivery fees. Local fees, commonly known as RMB fees.   Local charges are generally expressed by Local Charges. Local fees at the port of departure may include pickup fees, packing fees, port fees, port security fees, bill of lading fees, manifest entry fees, terminal operation fees (THC) or origin surcharge (ORC), seal fees, customs declaration fees Wait. Under the FOB clause, these costs must be borne by the seller. Because the FOB clause is FOB, all costs and risks before the goods leave the port of shipment are borne by the seller (seller/shipper).   It should be noted that who will pay for the manifest declaration fees of the US AMS and the EU ENS? It can be understood like this: since AMS, ENS, etc. are declared before shipment at the port of departure, these expenses are also expenses incurred before 'offshore' and should be borne by the seller (seller/shipper). What do you think? 2. Ocean freight and related surcharges    The ocean freight from the port of departure to the destination port and related surcharges such as fuel surcharges are commonly known as US dollars.   The FOB clause is the FOB price, not the CIF price. FOB does not include freight and insurance premiums, so under the FOB clause, the ocean freight (Ocean Freight) must be borne by the foreign buyer. Because the ocean freight is borne by the foreign buyer, the goods traded on FOB terms are also called 'designated goodsMatters. Various shipping surcharges such as emergency fuel surcharge (EBS), Suez Canal surcharge (SCS), peak season surcharge (PSS), comprehensive rate increase surcharge (GRI), direct flight surcharge (D/A), etc. Fees are closely related to ocean freight and can be said to be part of ocean freight, so in FOB terms, these additional fees should also be borne by the buyer. 3. The local cost of the destination port     the local cost of the destination port including customs clearance fees and delivery fees.   Local fees at the destination port may include customs clearance fees, port maintenance fees, cargo handling fees, storage fees, operation fees, delivery fees, customs duties, etc. In the case of LCL by sea, there may also be unpacking fees, container washing fees, and sorting fees. The local cost of the destination port may vary widely in different countries.  Because the FOB clause is FOB, not CIF, there is no doubt that all local expenses at the destination port will be borne by the buyer (buyer/consignee).   In fact, in the Cu0026F and CIF transaction methods, the local cost of the destination port is also borne by the buyer. Because Cu0026F only increased the freight, CIF only increased the freight and insurance premiums. According to the 'General Rules for the Interpretation of International Trade TermsIn fact, the risk boundaries of FOB, Cu0026F and CIF are the same. Even if the port of departure crosses the ship’s rail, even if the delivery is completed, the risks and responsibilities of the goods are transferred to the buyer.   Finally, if the goods are to be insured, who should be responsible for insuring? Who will bear the premium? If it is a FOB and Cu0026F transaction, the insurance is the responsibility of the buyer, because neither FOB nor Cu0026F includes the premium; if it is the CIF transaction method, the insurance is the seller’s responsibility, because CIF includes the premium, 'I' means Insurance, and 'F' It is Freight, 'C' means Cost, which is FOB price. (Source network, for reference only) VIPU Supply Chain international logistics master is packing   Edit summary: After the above editor's summary, our freight forwarders should have a preliminary understanding of what costs should be borne by shippers under FOB terms. Generally, the international logistics company should include it in the door-to-door logistics cost when quoting with the customer, instead of separately settlement with the customer in the later period, this is the so-called one-off price. VIPU Supply Chain international logistics provides door-to-door double-clearance international logistics services for people going abroad or returning home all the year round. If you have logistics needs to go abroad or return to China, you are welcome to call our toll-free hotline.
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