SHIPPING FOB OR C&F
When it comes to international trade, two commonly used shipping terms are “FOB” (Free On Board) and “C&F” (Cost and Freight). These terms define the responsibilities and obligations of the buyer and the seller regarding the transportation and delivery of goods. Here’s a comprehensive breakdown of shipping FOB or C&F:
FOB (Free On Board):
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Transfer of Ownership and Risk: With FOB shipping, the seller is responsible for the goods until they are loaded onto the vessel or appointed transport at the specified port of shipment. Once loaded, ownership and risk transfer from the seller to the buyer.
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Delivery at Port of Shipment: The seller is responsible for delivering the goods to the port of shipment and arranging for export customs clearance. They bear the costs and risks associated with the goods until they are loaded onto the vessel.
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Transportation Costs: The buyer assumes responsibility for transportation costs, including the main freight charges, insurance, and any additional costs incurred after the goods are loaded onto the vessel. The buyer also handles the logistics and contracts with freight forwarders or shipping lines for the transportation of the goods.
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Export Documentation: The seller is responsible for providing the necessary export documentation, such as commercial invoices, packing lists, and export licenses or permits. They must ensure that the documents are accurate and in compliance with the export regulations of the country of origin.
C&F (Cost and Freight), also known as CFR (Cost and Freight):
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Transfer of Ownership and Risk: Similar to FOB, the transfer of ownership and risk occurs once the goods are loaded onto the vessel or appointed transport at the port of shipment. The buyer assumes ownership and risk from that point forward.
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Cost and Freight: The seller is responsible for the cost of the goods and freight charges to transport the goods to the named port of destination. They bear the expenses for shipping the goods, including the main freight charges. However, the buyer is responsible for arranging insurance for the goods during transit.
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Delivery at Port of Destination: The seller is responsible for delivering the goods to the port of destination and arranging import customs clearance at that port. The buyer takes over the goods once they have arrived at the designated port.
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Import Duties and Taxes: The buyer is responsible for paying any import duties, taxes, or other charges associated with the customs clearance and importation of the goods at the destination port.
It’s important to note that the responsibilities and obligations may vary depending on the specific terms agreed upon in the sales contract between the buyer and the seller. Therefore, it’s crucial for both parties to have a clear understanding of their roles and responsibilities under the chosen shipping term (FOB or C&F) to ensure a smooth and efficient international trade transaction.