What is FOB? What are the main obligations of the buyer?

What is FOB? What are the main obligations of the buyer?

1. What is FOB?

FOB is FREE ON BOARD, meaning FREE ON BOARD, specify the name of the port of shipment.

2. Applicable mode of transport: sea and inland river transport.

3. Key points: the risk division point, delivery point and cost division point are all on the side of the ship designated by the buyer at the port of shipment (in actual operation, they are loaded into the cabin).

4. Main obligations of the Buyer

A. Responsible for paying the price of the goods as stipulated in the contract.

B. Book shipping space or charter the vessel, pay the freight (sea freight) and give the seller full notice of the name of the vessel, the place of loading and the required time of delivery. Usually, the sea freight paid by the buyer is 10-20% cheaper than that booked by the seller.

C. Obtain, at FOB his own risk and expense, import licenses (quotas are also obtained from domestic administrative authorities by the buyer in the importing country) or other approval certificates and complete all customs formalities for the importation of the goods and, if necessary, transit of the goods through another country.

D. Bear all costs and risks after the goods have passed the ship's rail at the port of shipment (actually after within the ship's hold at the port of shipment)

E. To receive the goods delivered by the seller in accordance with the contract, and to accept documents in accordance with the contract.

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