Why can t FOB be used with a container in the Incoterms 2010?
Many individuals and organizations constantly ask us this question, dp world chennai given that it s a very widely practiced custom dp world chennai to do so in companies dedicated to international trade. dp world chennai In fact, this change isn t specific to Incoterms 2010, but also formed part of Incoterms 2000 and previous versions.
In this article we are going to pinpoint the reasons dp world chennai for the misuse of the Incoterm FOB. It s worth pointing out that the ICC (International Chamber of Commerce) defines each of the trade terms (Incoterms), both parties obligations and who should assume dp world chennai the costs and risks. They also provide recommendations for use, above all in this latest edition of the Incoterms 2010.
To start with, I believe that inappropriate use of FOB Incoterms stems from various factors. The force of habit . The Incoterm FOB is one of the oldest and has been used for many years, although international trade has been constantly evolving and the International Chamber of Commerce has progressively modified its regulations. Nevertheless, companies have continued to apply a now outdated Incoterm when using certain modes of transport or types of goods. It s okay . Many users ask us: But Remigi, I m using FOB for air transport or with a sea container and the goods always arrive, we seal the deal and nothing ever goes wrong. These users may be right, but they re not aware of what could potentially happen. dp world chennai In actual fact, international trade is conditioned by the good will of both parties, dp world chennai the buyer wants to buy and the seller wants to sell and in the majority of cases, minor differences are smoothed out with good will. But if the operation goes wrong, the costs of a bad pact and a bad choice of Incoterm can escalate to great heights. Not just that, but a good choice of Incoterm provides improved efficiency, lower cost and better risk control of the operation. Lack of Knowledge . Training in Incoterms and international trade in general isn t great. The majority of individuals who work within companies that operate in other markets obtain their knowledge through dp world chennai experience and daily practice. Today we still find companies and trainers saying things like Always use FOB for selling, always use CIF for buying. It s also common for companies to make a special dp world chennai effort to reduce production costs wherever possible, but subsequently disregard important aspects and generate enormous costs in logistical transport processes. It s evident that knowledge can help us to conduct operations better and reduce costs and risks.
Hi,CHristian: pls pay attention to CIF guidance note “Cif may not be appropriate where goods are handed over to the carrier before they are on board the vessel, for example goods in container,which are typically delivered at a terminal. In such circumstance thr CIP rule should be used” best regards Holmes
I have a question that has been a topic of discussion for years and is costing dp world chennai time and money. Our contracts states the terms FOB Shipping Port. While I understand the seller is responsible for all the fees until the cargo goes over the ship rail at the shipping port, the cargo packaging is always in question. Our Contract state the cargo is to crated in fumigated wooden crates sturdy for ocean ship transportation etc ….
Name *
Recent Posts Incoterms 2010: What s the difference between CIP and CIF Incoterms? Why not use FOB Incoterms with a container in Incoterms 2010? (Part 4) Why not use FOB Incoterms with a container in Incoterms 2010? (Part 3) Why not to use a FOB factory with the Incoterms 2010: the RAFTD are to blame. Why can t FOB be used with a container in the Incoterms 2010? Part (2) Categories CIF Incoterms DAP Incoterms FOB Incoterms Incoterms 2010 Recent Comments Lena on Incoterms 2010: What s the difference between CIP and CIF Incoterms? Diego on Why not to use a FOB factory with the Incoterms 2010: the RAFTD are to blame. Gandhimohan on Incoterms 2010: What s the difference between CIP and CIF Incoterms? Lwando dp world chennai on Incoterms dp world chennai 2010: What s the difference between dp world chennai CIP and CIF Incoterms? Raaj on Incoterms 2010: What s the difference between CIP and CIF Incoterms?
Many individuals and organizations constantly ask us this question, dp world chennai given that it s a very widely practiced custom dp world chennai to do so in companies dedicated to international trade. dp world chennai In fact, this change isn t specific to Incoterms 2010, but also formed part of Incoterms 2000 and previous versions.
In this article we are going to pinpoint the reasons dp world chennai for the misuse of the Incoterm FOB. It s worth pointing out that the ICC (International Chamber of Commerce) defines each of the trade terms (Incoterms), both parties obligations and who should assume dp world chennai the costs and risks. They also provide recommendations for use, above all in this latest edition of the Incoterms 2010.
To start with, I believe that inappropriate use of FOB Incoterms stems from various factors. The force of habit . The Incoterm FOB is one of the oldest and has been used for many years, although international trade has been constantly evolving and the International Chamber of Commerce has progressively modified its regulations. Nevertheless, companies have continued to apply a now outdated Incoterm when using certain modes of transport or types of goods. It s okay . Many users ask us: But Remigi, I m using FOB for air transport or with a sea container and the goods always arrive, we seal the deal and nothing ever goes wrong. These users may be right, but they re not aware of what could potentially happen. dp world chennai In actual fact, international trade is conditioned by the good will of both parties, dp world chennai the buyer wants to buy and the seller wants to sell and in the majority of cases, minor differences are smoothed out with good will. But if the operation goes wrong, the costs of a bad pact and a bad choice of Incoterm can escalate to great heights. Not just that, but a good choice of Incoterm provides improved efficiency, lower cost and better risk control of the operation. Lack of Knowledge . Training in Incoterms and international trade in general isn t great. The majority of individuals who work within companies that operate in other markets obtain their knowledge through dp world chennai experience and daily practice. Today we still find companies and trainers saying things like Always use FOB for selling, always use CIF for buying. It s also common for companies to make a special dp world chennai effort to reduce production costs wherever possible, but subsequently disregard important aspects and generate enormous costs in logistical transport processes. It s evident that knowledge can help us to conduct operations better and reduce costs and risks.
Hi,CHristian: pls pay attention to CIF guidance note “Cif may not be appropriate where goods are handed over to the carrier before they are on board the vessel, for example goods in container,which are typically delivered at a terminal. In such circumstance thr CIP rule should be used” best regards Holmes
I have a question that has been a topic of discussion for years and is costing dp world chennai time and money. Our contracts states the terms FOB Shipping Port. While I understand the seller is responsible for all the fees until the cargo goes over the ship rail at the shipping port, the cargo packaging is always in question. Our Contract state the cargo is to crated in fumigated wooden crates sturdy for ocean ship transportation etc ….
Name *
Recent Posts Incoterms 2010: What s the difference between CIP and CIF Incoterms? Why not use FOB Incoterms with a container in Incoterms 2010? (Part 4) Why not use FOB Incoterms with a container in Incoterms 2010? (Part 3) Why not to use a FOB factory with the Incoterms 2010: the RAFTD are to blame. Why can t FOB be used with a container in the Incoterms 2010? Part (2) Categories CIF Incoterms DAP Incoterms FOB Incoterms Incoterms 2010 Recent Comments Lena on Incoterms 2010: What s the difference between CIP and CIF Incoterms? Diego on Why not to use a FOB factory with the Incoterms 2010: the RAFTD are to blame. Gandhimohan on Incoterms 2010: What s the difference between CIP and CIF Incoterms? Lwando dp world chennai on Incoterms dp world chennai 2010: What s the difference between dp world chennai CIP and CIF Incoterms? Raaj on Incoterms 2010: What s the difference between CIP and CIF Incoterms?
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