Saturday, June 9, 2012
FOB Shipping Defined
What is FOB? This is a common question among those fresh to the shipping industry and also a great inquiry, indeed. Failure to properly have this concept can lead to the decline of a lot of bucks.
The best FOB definition can be found in the meaning of the acronym itself, that is definitely Free on Board, while some choose to utilize the FOB meaning of Freight on Board. Either way, this term signifies for the ship crew at what point throughout the shipping process the buyer for the product is not liable for charges.
Some may wonder just what the value of understanding the FOB definition is, and then there are numerous explanations why understanding this concept is vital. The terms FOB determines the danger of loss involved as the item is transferred coming from the seller towards the buyer. Furthermore, the buyer can lose serious money from being ignorant of these terms as they stipulate the bucks owed on the shipment, all this will add up to a large sum of money especially for larger cargo.
Many are still confused at their options upon hearing the general definition. There are four standard choices in FOB. First, the seller will be responsible for paying for all the shipping charges and the buyer is responsible for insurance on the product, and all this method is referred to as CF Pay Freight to Destination. Others opt to establish an FOB Destination which places an increased responsibility to the seller because they are responsible for both the cost to ship together with the chance of loss. FOB Shipping Point certainly is the exact opposite; the purchaser is liable for charges and possible damage. Finally, the choice of Pay Insurance and Freight to Destination stipulates that the seller is liable for acquiring insurance to the product to protect it during the shipment.
Buyers of imported products who are doing so for some time and have never been presented with their FOB options should inquire since they are susceptible to the terms set by the shipper, and these are frequently never to their advantage.
In case the product becomes lost or stolen throughout the shipping process, the buyer can be accountable for covering such damage. Often buyers will carry insurance for the shipment, nevertheless this really is a thing that needs to be determined beforehand from the terms and conditions. Due to this fact, all buyers of shipped goods should understand the concept of FOB.
Learn more about FOB Shipping at WhatIsFOB.com
The best FOB definition can be found in the meaning of the acronym itself, that is definitely Free on Board, while some choose to utilize the FOB meaning of Freight on Board. Either way, this term signifies for the ship crew at what point throughout the shipping process the buyer for the product is not liable for charges.
Some may wonder just what the value of understanding the FOB definition is, and then there are numerous explanations why understanding this concept is vital. The terms FOB determines the danger of loss involved as the item is transferred coming from the seller towards the buyer. Furthermore, the buyer can lose serious money from being ignorant of these terms as they stipulate the bucks owed on the shipment, all this will add up to a large sum of money especially for larger cargo.
Many are still confused at their options upon hearing the general definition. There are four standard choices in FOB. First, the seller will be responsible for paying for all the shipping charges and the buyer is responsible for insurance on the product, and all this method is referred to as CF Pay Freight to Destination. Others opt to establish an FOB Destination which places an increased responsibility to the seller because they are responsible for both the cost to ship together with the chance of loss. FOB Shipping Point certainly is the exact opposite; the purchaser is liable for charges and possible damage. Finally, the choice of Pay Insurance and Freight to Destination stipulates that the seller is liable for acquiring insurance to the product to protect it during the shipment.
Buyers of imported products who are doing so for some time and have never been presented with their FOB options should inquire since they are susceptible to the terms set by the shipper, and these are frequently never to their advantage.
In case the product becomes lost or stolen throughout the shipping process, the buyer can be accountable for covering such damage. Often buyers will carry insurance for the shipment, nevertheless this really is a thing that needs to be determined beforehand from the terms and conditions. Due to this fact, all buyers of shipped goods should understand the concept of FOB.
Learn more about FOB Shipping at WhatIsFOB.com
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