What Is FOB In Shippingterms?
In shipping, the term FOB means ‘Free on Board’. It’s usually the best way to control your shipping costs. Under FOB shipping terms, your supplier is responsible for all costs involved in the process up until the goods are on a vessel at the designated port. Once goods have been loaded onto the vessel the buyer is responsible for any costs and risks involved in the onward shipment.i
Using FOB shipping terms means thecosts, risks and responsibilities are split fairly equally between the buyer and the seller of goods. On FOB terms your supplier is responsible for paying all the costs involved with your shipment until the goods are on a vessel at their outbound port. FOB Shenzhen, for example, would mean that your supplier is responsible for goods until they’re loaded on the vessel at Shenzhen. After this point, the responsibility then shifts to you.
Below tableshow thecontrastbetweentwo shipping terms that can be used when importing cargo via Air or Sea freightto your country.
| Costs using FOB Terms | Costs using EXW Terms | |
|---|---|---|
| Export customs procedures | Seller | Buyer |
| Transport to export port/airport | Seller | Buyer |
| Unloading of truck in port | Seller | Buyer |
| Loading goods onto vessel/airplane | Seller | Buyer |
| Transportation to Destination Country | Buyer | Buyer |
| Insurance | Buyer | Buyer |
| Unloading at destination port/airport | Buyer | Buyer |
| Loading for local haulage | Buyer | Buyer |
| Transport to final destination | Buyer | Buyer |
| Import customs clearance | Buyer | Buyer |
| Import duties and taxes | Buyer | Buyer |
Why buy FOBshipping term with Supplier?
Buying Free On Board simply has manybenefits over EXW. You have better control of the freight and the freight cost. The cost is always important and you will have a better chance of gaining a more competitive freight rate. Using a trustfulfreight forwarder will help you obtain more accurate information in a timely manner. They can assist you better once a problem arises. The logistic partner you choose always works together with you for your best interest not your suppliers.
If you’re buying goods on FOB terms, it’s pretty common to use a freight forwarder to get the transportation and import processes set up. This can make life easier as you’ll usually only then have one point of contact to get your goods to your destination.
Alternatively you can make arrangements for international transportation yourself, although you’ll have to consider several different stages of the process, including the seaor airfreight to your local port, local haulage in your countryto get to your store or warehouse, and all the customs clearance processes required. If you need a little extra help to get all your import paperwork arranged, it’s possible to employ acustoms brokerto help.
FOB can be a cost effective and reasonably simple route to importfrom China to your country. However, importing is an expensive process, and you’ll want to evaluate all your options, to make sure you get the right deal for your business.
Freight Forwarders can handle both EXW or FOB shipping terms
No matter what your shipment terms are,EXW or FOB,nearly any freight forwarder will be able to easily handle the delivery of your shipment , including the pickup of your shipment from your supplier’s factory if you have EXW shipment terms.
If your shipment is small, less than 200kgs or less than 1 cbm, EXW is betterforsuch a shipment,Express shippinglike FedEx, TNT, DHL or UPS is the best choice.If you have a good freight partner, hopefully us, no matter EXW orFOB when negotiating with your supplier, or what your freight specialty or shipping needs, you will always find a best-in-class shipping solution that fits your budget and specifications with Winsky Freight from China.It will be easy to work with us, why not to ask a free shipping quote nowand let us start working together.
