Detail the FOB price (FOB), foreign trade business must not know!
FOB price, say again \”FOB prices\”, English abbreviation for FOB, is one of the commonly used trade terms in international trade.Refers to the transport from the port of shipment to the destination and the insurance premium shall be borne by the buyer, not included in the settlement price of the sales price.
Trades on a fob basis, the buyer is responsible for sending ship collect the goods, the seller shall at the port of shipment stipulated in the contract and will make the shipment within the time limit stipulated by the designated by the buyer of the ship, and promptly notify the buyer. When the goods are loaded at the loading port, the risk is transferred from the seller to the buyer.
In this term, we need to take the risk of the goods to the customer forwarder is the designated place, but we in the terminology to note is the cost.
The cost consists of: domestic freight + port local fees, and we usually miss the local fees of the port.
Due to the customer designated forwarder will charge the cost of higher than our own forwarder, so we offer to the client must be aware of, or this is the point of our profits.
When we offer our clients F.O.B. prices, the price we offer to our customers is the price of domestic freight plus local port and cost of goods. We must not write the FOB as an EXW to calculate the cost, otherwise we will lose part of the cost, maybe that part of the cost is our own profit.
There we know FOB, that surely there must be a CIF, for a long time, people are used to add the FOB price in the international trade condition known as the FOB price, thus the price term CIF they include freight and insurance premium as CIF.
But the real price is not CIF, but DES. Fob DES refers to the port of destination, the seller is responsible for shipping to the port of destination on board, is responsible for the goods to the port, all expenses and risks before the goods on board the ship to the disposal of the buyer, but not the goods import customs clearance formalities, the seller’s delivery is completed.
CIF is not CIF because the risk transfer line of CIF is also the port of shipment rather than the destination port. For CIF term belongs to a form of delivery, after delivery is the port of shipment ship’s rail, the risk transfer to the consignee, do not need to send the goods to the customer designated port in order to be complete delivery of the goods.
Clinch a deal the CIF price terms of the contract, for example, if the carrying vessel has not left the port of shipment on the rocks, and the buyer to the seller is unable to submit a claim, the reason is that after across the ship’s rail in the risk is transferred to the buyer, the buyer can only claim for compensation according to insurance contract to the insurance company, it shows that the seller is not responsible to the port of destination for risk. So we should not mistake CIF for a CIF price.
Fob for we pay special attention to the issues of the miscellaneous expenses of port of shipment, as we talk to the customer after all expenses can we know the customer’s designated forwarder information, so we missed the know at that time the customer designated forwarder charge standard, then the cost for us and our budget will cause a certain loss for us.
So we in the trade term will be asked about the customer and customer has talked to specify forwarder information to check with them what is the local port charges we this batch of shipment, and do the most accurate quotation, don’t let yourself budget good profits just walked off.
And the FOB customer must specify the shipper! What should I do if I have no one to stock?
Let’s do one case
Qingdao furniture export company (hereinafter referred to as the seller) and the south Korean company (hereinafter referred to as the buyer) trade contracts, wooden furniture exports to South Korea company by the Qingdao company a, for the FOB trade ways.
The seller shall order the shipment in accordance with the buyer’s instructions, and deliver the full set of original bill of lading to the seller, and the bill of lading is issued to the company.
The seller, after receiving the bill of lading, agrees to make payment for the buyer by the copy of the bill of lading, but is not paid by the consignee until the destination. Although the bill of lading is still in his hand, but, after all payment for goods not received, to return or resell the third party will bring big loss, so the sellers continue to press. However, later, the seller learned that the goods had been mentioned and the buyer would not pay again! Bill of lading in hand, how can the goods be mentioned?
The seller then sued the court for the carrier’s liability. The court ruled that the carrier B was liable for compensation. But the question is, does the carrier have enough compensation? At the moment, companies that don’t have a single stock are usually like this: they may not be easy to take responsibility for, as well as overseas.
FOB means that the buyer specifies the carrier (usually the agent of the foreign shipper and its agent in China), and the buyer controls the carriage. Shippers often listen to buyers and are even directly controlled by buyers; No single release usually occurs in this situation!
In this form of trade, there are usually two bills of lading: the dongdan and the shippers. The shipper shall order the shipping company for shipper by himself (or his agent) to the shipping company, and obtain the dongdan of the ship; Domestic exporters get a bill of lading (not even a bill of lading) issued by the shipper, and the shipper and consignee usually show the seller and the buyer.
The freight forwarders will be able to send the shipping company to the foreign agent after obtaining the dongdan from the shipping company, and the shipping company will be able to pick up the goods from the shipping company after the shipping order is received. It is another thing that foreign shippers will be able to deliver the goods when they are delivered to the actual consignee. Once foreign freight forwarders in the delivery of the goods to the consignee does not require the consignee to the original bill of lading, so the bill of lading shipper hand in a sense can be regarded as waste paper.
What kind of delivery is safer?
Facts have proven that in the export business, as the seller in accordance with the actual conditions of a transaction, carefully select the appropriate trade terms for preventing eci, improve the economic benefit is very necessary. Here are a few things to note in choosing trade terms.
Generally speaking, it is better to use CIF or CFR terms in the export business than to use FOB. Because, under the condition of CIF, the three contract involved in the international sale of goods (business contract, the contract of carriage and insurance contracts) are covered by the seller as his client, he can according to the situation as a whole to arrange the goods, shipment, insurance, etc, to ensure that the process on each other. In addition, it is conducive to the development of the domestic shipping industry and insurance industry, and increase the income of service trade. Of course, this also is not absolute, should the particular case according to the trade of goods first consider themselves have any difficulty to arrange transportation, and whether the economical factors such as economy.
FOB risk is that if you specify freight forwarders can not direct booking, and by other professional Courier route cargo tank, then for control of the real right doesn’t really in the transportation, caused if transportation problems, unable to solve in time.
The seller may say that this FOB is not our responsibility, it’s not our concern, I don’t have to worry about it. This is a bit of a problem, because when the freight line is a multiple-choice, when the shipping time is extended, the increase in the turnover of the factory’s capital is increased. Also to South America, for example, some ship to 60 days, some half as long as the time is enough (specific ship company I will not say, manufacturers when booking remember asking voyage, this is very important), it will delay time of receipt to the customer. Consignee to reduce transport costs, sometimes at the specified range longer ship transport, such behavior can be understood, of course, there were some manufacturers, because of the warehouse, willing to go long voyage the ship, can reduce the storage charges. If the value is less, so don’t see what, if the value is bigger, the guest slow payment will lead to uncertainty of currency issue, I think factory has deep experience, exchange rates, now a day, hui loss problem, we should pay attention to.