By means of FOB, the border of the responsibility of the seller and the buyer in sea transportation is determined. In this way, the prevailing ambiguities regarding the responsibilities of the parties will be resolved. In this article, we will tell you what FOB is. If you want to know the importance of FOB in sea transportation and the duties of buyer and seller in this Incoterms, just spend 5 minutes of your time reading this article.
What is FOB?
The term FOB is a common term in the field of shipping that means "shipped on board". This term is commonly used in international trade and commerce to indicate the point at which the seller's responsibility for the goods in transit ends and the buyer's responsibility begins. In general, FOB means cost up to the moment of delivery on board. Also, with the help of this rule, it is shown what everyone is responsible for in transportation. The term FOB is used in various transportation methods such as international air and sea transportation; In this article, we will examine this issue in sea transportation
What are the terms and general rules of the transaction based on FOB?
When a transaction is arranged on FOB terms, the seller assumes responsibility for the costs and risks associated with transporting the goods to a specific location or port for shipment. This responsibility will be transferred to the buyer after the goods are loaded onto the specified carrier, which is usually a ship. For example, if the buyer needs to use other transportation methods and cooperate with a combined transportation company to receive the goods at the final destination, he will be responsible for paying the transportation costs.
FOB shipping point
The term FOB is usually associated with the name of a place. Such as FOB Shanghai or FOB New York which indicates a specific point. This association of the place name with the FOB is to identify the place of transfer of responsibility. At this point, the responsibilities will be transferred from the seller to the buyer; Therefore, after the delivery of the goods at this place, the buyer will be responsible for the remaining costs of transportation, insurance, customs and other costs related to transporting the goods to the final destination. For example, in the case of an FOB contract to transport cargo from Dubai to Iran, the cost of delivering the goods to the ship's deck is the responsibility of the customer, and after delivery is the responsibility of the buyer.
Familiarity with seller and buyer duties in FOB Incoterms
The duties of the seller and the buyer in FOB Incoterms are divided into several main parts, such as the preparation and delivery of goods at the port of loading, payment of expenses, insurance and responsibilities related to customs formalities. In the following, we will examine each of these cases separately.
General requirements of buyer and seller in FOB
According to the general requirements of FOB, the buyer is responsible for paying the price of the goods according to the sales contract. According to the sales contract, the seller will be obliged to prepare the goods and the sales invoice. In case of agreement between the parties, the seller may prepare an electronic sample instead of a paper document. After setting up the transport document, you can use the cargo method to send bulk commercial loads and personal items. But before that, you should know what "cargo" is and what methods and conditions it uses to transport your goods.
Rules for delivery of goods in FOB by the seller
The seller is obliged to deliver the goods on the ship selected by the buyer and the designated loading point, for example, to send cargo from Germany to Iran. In fact, the seller is responsible for providing the delivered goods. According to FOB Incoterms requirements, the goods must be delivered on the date and within the specified time frame. If there is no specific time for the delivery of the goods, the relevant measures will be taken according to the conditions of the port and until the end of the agreed time period. In this section, the buyer is also obliged to deliver the goods on time.
Responsibilities of seller and buyer in FOB contract
In FOB Incoterms, the seller is not responsible for the contract of carriage of goods towards the buyer. Only at the request of the buyer, the seller is obliged to provide the seller with all the information related to the risk, the cost of transporting goods and insurance regarding an issue such as the export of cement to Turkey.
This issue helps the buyer to go through the steps of transporting goods. The FOB transportation contract, if agreed upon, is regulated according to customary conditions and taking into account the risk and cost of the buyer. In this contract, the costs related to transportation until the delivery of the goods are the responsibility of the seller.
Familiarity with seller and buyer duties in FOB Incoterms
The duties of the seller and the buyer in FOB Incoterms are divided into several main parts, such as the preparation and delivery of goods at the port of loading, payment of expenses, insurance and responsibilities related to customs formalities. In the following, we will examine each of these cases separately.
General requirements of buyer and seller in FOB
According to the general requirements of FOB, the buyer is responsible for paying the price of the goods according to the sales contract. According to the sales contract, the seller will be obliged to prepare the goods and the sales invoice. In case of agreement between the parties, the seller may prepare an electronic sample instead of a paper document. After setting up the transport document, you can use the cargo method to send bulk commercial loads and personal items. But before that, you should know what "cargo" is and what methods and conditions it uses to transport your goods.
Rules for delivery of goods in FOB by the seller
The seller is obliged to deliver the goods on the ship selected by the buyer and the designated loading point, for example, to send cargo from Germany to Iran. In fact, the seller is responsible for providing the delivered goods. According to FOB Incoterms requirements, the goods must be delivered on the date and within the specified time frame. If there is no specific time for the delivery of the goods, the relevant measures will be taken according to the conditions of the port and until the end of the agreed time period. In this section, the buyer is also obliged to deliver the goods on time.
Responsibilities of seller and buyer in FOB contract
In FOB Incoterms, the seller is not responsible for the contract of carriage of goods towards the buyer. Only at the request of the buyer, the seller is obliged to provide the seller with all the information related to the risk, the cost of transporting goods and insurance regarding an issue such as the export of cement to Turkey.
This issue helps the buyer to go through the steps of transporting goods. The FOB transportation contract, if agreed upon, is regulated according to customary conditions and taking into account the risk and cost of the buyer. In this contract, the costs related to transportation until the delivery of the goods are the responsibility of the seller.