What's the FOB trade Trems

In a transaction conducted at an offshore price, the buyer is responsible for dispatching a ship to pick up the goods. The seller shall load the goods onto the vessel designated by the buyer at the port of loading specified in the contract and within the prescribed period, and notify the buyer promptly. When the goods are loaded onto the designated vessel at the loading port, the risk is transferred from the seller to the buyer.

When closing the transaction on FOB terms, the seller is responsible for paying all expenses incurred before the goods are loaded onto the ship. However, there is no unified interpretation of the concept of "loading the ship" among different countries, and the various costs associated with loading are borne by different parties. The customs or practices of each country are also not completely consistent. If liner transportation is adopted, the loading and unloading fees will be included in the liner freight and naturally borne by the buyer responsible for chartering the ship; When using charter transportation, the shipowner generally does not bear the loading and unloading costs. It is necessary to clarify who should bear the various costs of loading the ship. In order to illustrate the issue of the burden of shipping costs, both parties often add additional conditions after the FOB term, which forms a deformation of FOB. It mainly includes the following types:

1. FOB Liner Terms

This variation refers to the handling of shipping costs according to the practice of the liner, which is borne by the shipowner or the buyer. So, by adopting this modification, the seller does not bear the related costs of loading the ship.

2. FOB Under Tackle

The seller shall bear the cost of delivering the goods to the hook of the vessel designated by the buyer, while the lifting and other related expenses shall be borne by the buyer.

3. FOB Stowed (including FOB container handling fees)

The seller is responsible for loading the goods into the cargo hold and bearing the shipping costs, including container handling fees. Cabin management fee refers to the cost of arranging and tidying up goods after they are loaded into the cabin.

4. FOB Trimed (including FOB demurrage)

The seller is responsible for loading the goods into the cargo hold and bearing the shipping costs, including demurrage fees. Leveling fee refers to the cost required to level the bulk cargo loaded into the cabin.

Have you already known about it? What do you usually do when you are doing foreign trade business?