Under which shipping terms is the buyer responsible for shipping?
Under FOB contracts, the buyer is responsible for shipping and other costs, as well as insurance as soon as the goods are loaded onto the vessel and during the voyage. FOB contracts are generally more cost-effective because buyers have more control over shipping and insurance.
FOB Add-on Terms
FOB Origin, Freight Collect: The buyer pays for freight and shipping costs and assumes full responsibility for the cargo.
"FOB Origin" or FOB Shipping Point" means the buyer accepts the title of the goods at the shipment point and assumes all risk once the seller ships the product. The buyer is responsible if the goods are damaged or lost while in transit.
Once the goods are on the ship, the buyer is financially responsible for all costs associated with transport as well as customs, taxes, and other fees. For FOB destination, the seller assumes all costs and fees until the goods reach their destination.
FOB, FREE ON BOARD FOB price, all costs and risks borne by the shipper before the cargo passes through the ship's rail. CIF, COST INSURANCE FREIGHT plus insurance, all costs of goods to the port of destination, the insurance is borne by the shipper. C&F, CFR COST AND FRIEGHT have the same meaning.
The party responsible for shipping the goods is the 'shipper' or 'consignor'. This would usually be the seller. The 'consignee' is usually the buyer and is the person named as consignee in the bill of lading.
Freight-in refers to the shipping costs for which the buyer is responsible when receiving shipment from a seller, such as delivery and insurance expenses.
EX Works (EXW) – This Incoterm places the most responsibility on the buyer. The seller makes the goods available at a named place, typically their warehouse or factory. All transportation arrangements, costs, and risks fall on the buyer.
FOB stands for “free on board” or “freight on board” and is a designation that is used to indicate when liability and ownership of goods is transferred from a seller to a buyer. Free on Board: Free on board indicates whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping.
FOB (Free on Board)
Under the Free on Board Incoterm, the risk of the goods is transferred from the seller to the buyer as they are loaded on the vessel at the port of departure. Under the FOB Incoterm, the buyer is liable, and not seller, in case the goods are lost, damaged or destroyed during the transportation.
Which incoterm buyer is responsible for loading the goods on a ship and all costs thereafter?
FAS (Free Alongside Ship)
The buyer is responsible for the cost and risk involved in loading the goods, and all costs thereafter.
At the same time, the buyer should be adding to its stock. The buyer assumes all risks and benefits of ownership as of the moment the shipment arrives at the shipping dock. Also, under FOB destination conditions, the seller is liable for the merchandise's transportation costs.
They are responsible for the costs of export clearance, transport, and insurance coverage to the named port of destination. The buyer is responsible for the goods when they are loaded onto the ship at the port of origin.
Thankfully, the question of who's at fault for damaged merchandise is an easy one to answer. Unless a prior arrangement between the buyer and seller has been agreed upon or some fine print excuses them of damages, the seller is responsible—at least initially—for the damaged item.
In a DDP agreement, the buyer is only responsible for the cost to unload their cargo. The seller must pay for all other shipping expenses, duties, and taxes. Under DAP Incoterms, the seller is responsible for only the shipping costs.
The seller is obligated to hand over any documents or information needed to enable the successful import, at the cost of the buyer. Import duties and taxes also need to be paid by the buyer. Buyer is responsible for insuring the transport of the goods to the final destination.
