Advantages of FOB deliveriessk_admin
Let’s understand the advantages of FOB deliveries. We start by explaining that FOB is the acronym for Free on Board, which can be called Free on Board Ship. It therefore designates a way of sharing responsibilities, rights and costs between buyer and seller in the trade of goods.
This term is included in the list of Incoterms (International Commercial Terms), established by the International Chamber of Commerce. They function as contractual formulas that fix rights and obligations, both for the exporter and the importer. They define precisely what is included in the price negotiated between both parties.
This Incoterm makes the seller responsible for putting the goods on board the ship. This ship, indicated by the buyer, at the designated port of embarkation.
As a result, it is the seller’s full responsibility to meet all the export conditions indicated. Because, the buyer is only responsible for paying for the shipment and for all the necessary expenses to pick up the goods. e.g.: Taxes.
Having said this let’s know what are the advantages of FOB deliveries for the seller and for the importer…
For the seller?
FOB shipping is very advantageous. It has a lower level of responsibility to the seller which ends as soon as the product is shipped.
For the importer?
The importer is therefore free to choose the freight forwarder he wishes and trusts, while at the same time minimising possible risks in the process. With FOB, it is possible to follow all the stages closely, such as the correct management of the goods.
This is, consequently, the most used method today. Therefore, it is the freight forwarding process used at ONI.