What is FOB Trade Terms? What does FOB Trade Terms mean?

FOB (Freeonboard), also known as "free on board", is a term commonly used in international **.

One. By FOB.

In the transaction, the buyer is responsible for dispatching the ship to take delivery of the goods, and the seller shall load the goods on the vessel designated by the buyer within the port of shipment and the specified time limit specified in the contract, and notify the buyer in a timely manner. When the goods are loaded onto the named vessel at the port of shipment, the risk passes from the seller to the buyer. Under FOB conditions, the seller bears the risks and costs, obtains an export license or other official documents, and is responsible for the export formalities.

In the case of a conclusion using FOB terminology, the seller is also required to provide, at its own expense, documents evidencing that it has fulfilled its obligations to deliver the goods as required, and if such documents are not transport documents, the seller may, at the buyer's request and at the buyer's risk and expense, assist in obtaining the bill of lading or other transport documents.

FOB generally refers to the FOB price, which is also known as the "FOB price". One of the most international terms. The seller completes delivery when the goods cross the ship's side at the named port of shipment.

This means that the buyer must bear all risk of loss of or damage to the goods from that point onwards. In addition, the seller must go through the formalities related to the export of the goods. This term applies only to sea or inland waterway transport.

FOB (Free on Board), that is, free on board at the port of shipment, also known as "fob". Under the terms of FOB**, the customer and the buyer are responsible for the sea freight, the sea freight and sea risk are borne by the buyer, and the consignor and seller are responsible for delivering the goods to the port of shipment specified in the contract and completing the export declaration procedures.

Features of FOB.

1. Take the shipside of the port of shipment as the delivery point, risk division point and cost division point.

The risk is transferred from the seller to the buyer as soon as the goods cross the ship's side when they are loaded on the ship.

2. Since the seller is responsible for transporting the goods to the ship's oak or onboard, and the buyer is responsible for contacting the vessel, the issue of frequent cargo connection under FOB conditions is very important.

3. Since the delivery point of FOB is eliminated on the ship at the port of shipment, the loading fee (loading fee, handling fee and flat room fee) at the port of shipment is often disputed. For this reason, FOB has derived a number of variations of the term, such as: FOB liner conditions, FOB under crane, FOB includes cabin, FOB includes flat cabin.

FOB inTerminologyIt is an English abbreviation, and its full name is free on board, which translates to "free on board".Free on boardIt is a more commonly used term in foreign affairs. This means by offshore**.

**, the buyer will send a ship to pick up the goods, and the seller shall load the goods to the ship designated by the buyer at the loading port within the time agreed in the contract, and notify the buyer on time.

When the product is loaded onto the designated vessel at the agreed port, the associated risk is transferred to the buyer. Individual countries encourage exports in CIF** terms, while imports** use FOB terms, which are insured or carried by their own national insurance and carriers. According to the 2000 General Principles, the term FOB only applies to two modes of foreign trade, maritime transport and inland waterways.

The formula for calculating fob**

fob= *CNY including tax.

Exchange rate; This formula only calculates the cost**, that is, it considers the value of the commodity, and does not consider the freight, port miscellaneous fees, and transaction costs of the manufacturer to the port.

and other expenses; As for foreign trade enterprises, this formula also does not take into account the profit aspect. As for RMB**, it includes VAT**, while the export tax rebate rate and VAT rate.

l c is a letter of credit, which is a common use of a transaction method in the world, its risk is low, by the bank as an intermediary, is a kind of bank credit, but the transaction parties to the bank pay a very high fee, now in the transaction also has the problem of letter of credit fraud, so the use should also be cautious. t t is a wire transfer, which is riskier than a letter of credit in a transaction, but the fee paid to the bank is much lower than that paid by a letter of credit. D P and D A both belong to collection, D P is a usance document against payment, that is to say, the buyer must pay the seller before being able to obtain the documents for the delivery of the goods, this transaction method enables the seller to receive the payment in a timely manner, D A is a document against acceptance, that is to say, as long as the buyer makes a certain payment commitment to the seller when receiving the payment notice, the relevant documents for the collection of the goods can be obtained, so D A has a certain risk.

FOB includes cabin (FOB Stowed) In order to make the chemical loaded on the ship properly placed and reasonably distributed, after the goods are loaded on the ship, need to be separated and sorted, this operation is called cabin management, who bears the handling fee, the ports of various countries have different regulations and interpretations, in order to clarify the responsibility and avoid disputes, when the buyer and seller negotiate the contract, they should make clear provisions on who bears the handling fee, if the buyer is unwilling to bear the loading freight and handling fee, then the transaction can be made according to the FOB Stowed conditions, According to this condition, the seller should not only bear the loading fee, but also pile up the goods loaded onto the ship and carry out the cushioning and arrangement, that is, it must also bear the handling fee, if the word "stowed" is not added after the FOB, and the charterparty stipulates that the ship does not bear the loading fee, the handling fee shall be borne by the buyer. FOB includes flat cabin (FOB trimmed) After the cargo is loaded on the ship, in order to maintain the pressure balance of the ship and the safety of navigation, the bulk cargo loaded into the hold in piles, such as coal, grain, etc., needs to be transferred and leveled. This operation is called a flat cabin.

According to the general practice, if the word "trimmed" is not added after the FOB, the seller does not bear the flat costs, and whether the flat costs are borne by the buyer or the ship depends on the provisions of the charterer's contract, and when the charterparty stipulates that the ship does not bear the loading costs, the flat fee shall be paid. FOB Stowed and Trimmed When the cargo loaded onto the ship, i.e. the catechism, is to be leveled, it is clear who bears these two costs, and if the words "stowed and trimmed" are added after the FOB, the seller must not only bear the cost of loading but also the cost of handling and trimming, and according to general practice, if the words "settling" and "flat" are not added after FOB, the cost of handling and flattening the cabin, the seller does not bear the burden.

FOB is free on board the ship at the port of shipment, and the risk is transferred from the seller to the buyer after the goods are loaded on the ship, and FOB is only applicable to sea freight;

CIF is delivery at the port of destination, the seller is responsible for freight and insurance, since the goods are loaded on the ship, the risk is transferred from the seller to Zheng Bo disturbing the buyer, like FOB, CIF is only applicable to sea freight;

CIP is delivery at destination, the seller is responsible for freight and insurance, since the goods are loaded on board, the risk is transferred from the seller to the buyer, CIP applies to any mode of transportation;

DDP is delivered at destination, and the seller bears all costs and risks, including customs clearance and customs duties in the importing country, and applies to any mode of transportation.

Extended Materials. Foreign **, also known as "foreign**" or "import and export**", referred to as "foreign trade", refers to the exchange of goods, services and technologies between a country (region) and another country (region). This kind of ** consists of two parts: import and export.

For countries (regions) that import goods or services, it is imports; For countries (regions) that ship goods or services, it is exports. This began to arise and develop in slave and feudal societies, and in capitalist societies, it developed even more rapidly. Its nature and role are determined by different social systems.

Related Concepts: Dependency.

**Dependence is also known as "foreign trade dependence rate" and "foreign trade coefficient". The degree of a country's dependence on ** is generally expressed by the proportion of the total value of foreign imports and exports in the gross national product or gross domestic product. That is, **dependence = external** total gross national product.

The change in the proportion means that the external ** is in the national.

Foreign**. A change in the position of the economy. Dependence can also be expressed as a share of total national income.

Dependency = Total Monetary Rollover Gross National Income. Foreign trade dependence is divided into export dependence and import dependence. Export dependence = total exports GDP Import dependence = total imports Gross national product.

**Compete. Competition is a form of competition that relies on low prices to strive for sales, occupy the market, and defeat competitors. When the products produced by a country or enterprise and another country or enterprise are the same or no different in terms of performance, utility, style, decoration, services provided, producer's reputation, advertising, etc., the country or enterprise can only attract customers and make its products have a market if they sell products at a lower price than their competitors.

Differences in function or appearance of products can cancel out the effect of this competition to a certain extent. In fact, the plagiarism phenomenon that often occurs in China's foreign trade enterprises undoubtedly makes enterprises fall into vicious competition.