Incoterms 2010 do not recommend a FOB Container combination
In 1936, The International Chamber of Commerce (ICC) created the first series of definitions of the Incoterms that we can consider predecessors to the Incoterms 2010 . The first official edition of the Incoterms ap taric 1936 included the Incoterm FOB.
It s worth noting that among the eight Incoterms 1936, six were for sea transport. It stands to reason that in those days, transport was ostensibly by boat, a little by train and seldom by truck, given that important infrastructures barely existed. The truck was generally limited to short distances, and the container didn t yet exist.
Malcolm McLean was the father of the container concept, and in 1956, the first journey in container was conducted. The concept of a unit load came into existence during World War II, and it wasn t until 1965 that containers were standardized with the ISO standard. From this moment on containers started to gain ground as a unit load component in international transport.
Incoterms 1936 included other Incoterms such as FOT (Free on Truck) and FOR (Free on Rail), designed for transport by truck and by train. The revision of the 1976 Incoterms was the first to include an annex for the Incoterm FOB that mentioned FOB Airport, given that air transport had undergone an important evolution and a solution was required, but handling and loading onto the airplane ap taric were not included.
In the revision of the Incoterms 1990, the International Chamber of Commerce included a new revision of the Incoterms rules, factoring in the evolution of international trade and significant changes in international transport, particularly in the use of containers and in combined and multi-modal transport, in addition to Roll-on Roll-Off transport, which led the ICC to incorporate a new Incoterm called FCA. This new Incoterm is associated to all-purpose ap taric transport, in other words any method of transport and the combination of all of them. FCA replaces FOB in the use of containers.
As we can historically verify, FOB Incoterms were not created for containers. Bad adaptation, accumulated habits and limited training (over 20 years of misuse) have generated the continuous misuse of FOB with containers.
Just ap taric because FOB wasn’t created for containers does not explain why you suggest we should not use it for containers? Your explanation seems to be tautalogical. Any chance you can provide ap taric a legal reason for avoiding use of FOB with goods packed in containers? What are the risks of “misuse”?
In the articles we have already posted we give some reasons for not using FOB with containers. ap taric But if you want an official reason, the main one is because the ICC recommends not to use FOB with containers. You can read more about this fact in the ICC official book, specifically in the fourth paragraph of the FOB guidance notes.
Thanks for the great explanations. However I would question your comment that FOT is for road transport. The use of the word “Truck” is the problem. In English English, a vehicle that moves on the road is a “Lorry” and a Truck moves on rails. In American English, Truck is used on road – but what do you use to describe the rail carrying item – Waggon, Car, or something else? Clarification would be appreciated please. The use of Truck is now more common in English English for road haulage. However, FOT as far as I remember was specifically for Rail use. Regards
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 ap taric 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 ap taric on Incoterms 2010: What s the difference between CIP and CIF Incoterms? Lwando on Incoterms ap taric 2010: What s the difference between CIP and CIF Incoterms? Raaj on Incoterms 2010: What s the difference between CIP and CIF Incoterms?
In 1936, The International Chamber of Commerce (ICC) created the first series of definitions of the Incoterms that we can consider predecessors to the Incoterms 2010 . The first official edition of the Incoterms ap taric 1936 included the Incoterm FOB.
It s worth noting that among the eight Incoterms 1936, six were for sea transport. It stands to reason that in those days, transport was ostensibly by boat, a little by train and seldom by truck, given that important infrastructures barely existed. The truck was generally limited to short distances, and the container didn t yet exist.
Malcolm McLean was the father of the container concept, and in 1956, the first journey in container was conducted. The concept of a unit load came into existence during World War II, and it wasn t until 1965 that containers were standardized with the ISO standard. From this moment on containers started to gain ground as a unit load component in international transport.
Incoterms 1936 included other Incoterms such as FOT (Free on Truck) and FOR (Free on Rail), designed for transport by truck and by train. The revision of the 1976 Incoterms was the first to include an annex for the Incoterm FOB that mentioned FOB Airport, given that air transport had undergone an important evolution and a solution was required, but handling and loading onto the airplane ap taric were not included.
In the revision of the Incoterms 1990, the International Chamber of Commerce included a new revision of the Incoterms rules, factoring in the evolution of international trade and significant changes in international transport, particularly in the use of containers and in combined and multi-modal transport, in addition to Roll-on Roll-Off transport, which led the ICC to incorporate a new Incoterm called FCA. This new Incoterm is associated to all-purpose ap taric transport, in other words any method of transport and the combination of all of them. FCA replaces FOB in the use of containers.
As we can historically verify, FOB Incoterms were not created for containers. Bad adaptation, accumulated habits and limited training (over 20 years of misuse) have generated the continuous misuse of FOB with containers.
Just ap taric because FOB wasn’t created for containers does not explain why you suggest we should not use it for containers? Your explanation seems to be tautalogical. Any chance you can provide ap taric a legal reason for avoiding use of FOB with goods packed in containers? What are the risks of “misuse”?
In the articles we have already posted we give some reasons for not using FOB with containers. ap taric But if you want an official reason, the main one is because the ICC recommends not to use FOB with containers. You can read more about this fact in the ICC official book, specifically in the fourth paragraph of the FOB guidance notes.
Thanks for the great explanations. However I would question your comment that FOT is for road transport. The use of the word “Truck” is the problem. In English English, a vehicle that moves on the road is a “Lorry” and a Truck moves on rails. In American English, Truck is used on road – but what do you use to describe the rail carrying item – Waggon, Car, or something else? Clarification would be appreciated please. The use of Truck is now more common in English English for road haulage. However, FOT as far as I remember was specifically for Rail use. Regards
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 ap taric 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 ap taric on Incoterms 2010: What s the difference between CIP and CIF Incoterms? Lwando on Incoterms ap taric 2010: What s the difference between CIP and CIF Incoterms? Raaj on Incoterms 2010: What s the difference between CIP and CIF Incoterms?
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