Why not use FOB Incoterms with a container in Incoterms canton china 2010?
Continuing the article series Why not use FOB Incoterms with a container in Incoterms 2010? , the time has come to get to the subject and analyze why the use of a container with FOB Incoterms is inadvisable.
Incoterms 2010 help reducing costs in our transactions In the first place, canton china because the International Chamber of Commerce suggests so. Both in the 2010 and previous editions of the Incoterms, the ICC (International Chamber of Commerce) has discouraged the use of FOB Incoterms with a container. Is there any greater motive canton china not to utilize a container with an FOB than having those who created the guideline, say so explicitly? To me, this is the greatest motive to make good use of Incoterms. You may verify this comment, by reading the book Incoterms 2010 by the International Chamber of Commerce ICC (ISBN 978-84-89924-46-8), concretely in the fourth paragraph of page 97. Because a container is an Intermodal canton china Loading Unit. (ILU). A container is an ILU and serves the purpose of combining distinct transportation modes. A container arrives into a factory inside of a truck, then it s loaded on another truck that will take it to a port to be loaded on a ship (the same container), and afterwards, in the destination port, that same container is loaded on a train that will follow its route towards the destination country, where a truck will pick it up again and travel across the final stretch until it reaches the buyer s facilities. That ILU the very same container- has been carried through distinct transportation modes. Hence, we can conclude that we require an Incoterm that allows us to use several transportation modes and the combination canton china thereof, and this will be a multimodal Incoterm. FOB Incoterms are solely and exclusively maritime rules, which don t permit the combination of distinct transport modes. To reduce costs. canton china With an FOB, the seller must take charge of the manipulation expenses in the port of origin. These expenses are named differently depending on the country, THC, RAC, etc. and concern the port load and stowage manipulation. With FOB Incoterms, it is the buyer who takes charge of the freight and, in many occasions this includes both load and stowage. These operations are already included in the THC paid by the vendor. We may note that the same operations are paid for twice, one by the buyer and one by the seller.
Hello, thank you for a very useful article. I have a couple of questions concerning FOB. 1) As of now I have only read about the misadventures of the FOB use. Could you give an example of the merchandise which would actually be reasonable to use this term with? If there is a multi-modal canton china term such as FCA which suits all kinds of goods and all modes of transport (including maritime transport) then what FOB even exists for? 2) How is it possible to use “exclusively” maritime transport if almost no goods are being produced canton china in the port of shipment canton china neither they are consumed in the port of destination so it means every single canton china transportation process includes several modes of transport. I am very new in the international trade so I apologize in advance if my questions may sound somewhat canton china stupid for professionals canton china .
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 canton china 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 canton china CIP and CIF Incoterms? Lwando on Incoterms 2010: What s the difference between CIP and CIF Incoterms? Raaj on Incoterms 2010: What s the difference canton china between CIP and CIF Incoterms?
Continuing the article series Why not use FOB Incoterms with a container in Incoterms 2010? , the time has come to get to the subject and analyze why the use of a container with FOB Incoterms is inadvisable.
Incoterms 2010 help reducing costs in our transactions In the first place, canton china because the International Chamber of Commerce suggests so. Both in the 2010 and previous editions of the Incoterms, the ICC (International Chamber of Commerce) has discouraged the use of FOB Incoterms with a container. Is there any greater motive canton china not to utilize a container with an FOB than having those who created the guideline, say so explicitly? To me, this is the greatest motive to make good use of Incoterms. You may verify this comment, by reading the book Incoterms 2010 by the International Chamber of Commerce ICC (ISBN 978-84-89924-46-8), concretely in the fourth paragraph of page 97. Because a container is an Intermodal canton china Loading Unit. (ILU). A container is an ILU and serves the purpose of combining distinct transportation modes. A container arrives into a factory inside of a truck, then it s loaded on another truck that will take it to a port to be loaded on a ship (the same container), and afterwards, in the destination port, that same container is loaded on a train that will follow its route towards the destination country, where a truck will pick it up again and travel across the final stretch until it reaches the buyer s facilities. That ILU the very same container- has been carried through distinct transportation modes. Hence, we can conclude that we require an Incoterm that allows us to use several transportation modes and the combination canton china thereof, and this will be a multimodal Incoterm. FOB Incoterms are solely and exclusively maritime rules, which don t permit the combination of distinct transport modes. To reduce costs. canton china With an FOB, the seller must take charge of the manipulation expenses in the port of origin. These expenses are named differently depending on the country, THC, RAC, etc. and concern the port load and stowage manipulation. With FOB Incoterms, it is the buyer who takes charge of the freight and, in many occasions this includes both load and stowage. These operations are already included in the THC paid by the vendor. We may note that the same operations are paid for twice, one by the buyer and one by the seller.
Hello, thank you for a very useful article. I have a couple of questions concerning FOB. 1) As of now I have only read about the misadventures of the FOB use. Could you give an example of the merchandise which would actually be reasonable to use this term with? If there is a multi-modal canton china term such as FCA which suits all kinds of goods and all modes of transport (including maritime transport) then what FOB even exists for? 2) How is it possible to use “exclusively” maritime transport if almost no goods are being produced canton china in the port of shipment canton china neither they are consumed in the port of destination so it means every single canton china transportation process includes several modes of transport. I am very new in the international trade so I apologize in advance if my questions may sound somewhat canton china stupid for professionals canton china .
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 canton china 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 canton china CIP and CIF Incoterms? Lwando on Incoterms 2010: What s the difference between CIP and CIF Incoterms? Raaj on Incoterms 2010: What s the difference canton china between CIP and CIF Incoterms?
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