FOB quotation, also known as "FOB", is one of the commonly used trade terms in international trade.

FOB (acronym p>FOB(Free On Board), the buyer is responsible for sending a ship to pick up the goods for the transaction conducted on FOB basis, and the seller shall load the goods on the ship designated by the buyer at the port of shipment stipulated in the contract and within the specified time limit, and notify the buyer in time. When the goods are loaded on the named ship at the port of shipment, the risk is transferred from the seller to the buyer.

At present, most domestic factories use one quotation, because the trailer and customs clearance fees are relatively fixed, and the sea freight is a floating price, so there is a certain time from production to shipment, and the buyer bears the freight, so the factory can avoid the risk of accidents during the sea freight fluctuation.

Simply put, it means buying equipment from abroad, and the seller only needs to send the equipment to the port in their country, and the rest of the freight and insurance costs from abroad to China are paid by himself.

Trade Terms of International trade, also known as price terms.

In international trade, the obligations of buyers and sellers will affect the price of goods. In the long-term practice of international trade, some terms of trade closely related to price are gradually linked with price, and several quotation modes are formed.

Domestic expenses in p>FOB:

1. Processing and finishing expenses;

2, packaging costs;

3. Storage expenses (storage/rent, fire insurance, etc.);

4. Domestic transportation expenses (warehouse to wharf);

5. Certificate fees (including commodity inspection fees, notarization fees, consular visa fees, certificate of origin fees, license fees, storage fees, etc.);

6. Shipping fees (shipping, lifting and barge fees, etc.);

7. Bank charges (discount interest, handling fees, etc.);

8. Estimated loss (loss, short loss, leakage, breakage, deterioration, etc.);

9. Post and telecommunications fees (telegram, telephone, telegram, fax, email, etc.).

FOB price terms:

It is customary in international trade to take the port and dock as the place of delivery, so there are three main price terms:?

1. Delivery at the dock in China: FOB

For example, delivery at the Shanghai port is called FOB SHANGHAI. In this way, in addition to the value of the goods themselves, you should also add the freight for transporting the goods to the Shanghai dock, the customs declaration and export fees and the miscellaneous fees generated at the Shanghai dock, which is the total cost price. FOB price is the most basic price.

simple formula: FOB = goods price+domestic freight and miscellaneous charges?

2. Delivery at foreign terminals: CNF?

For example, an agreement to deliver the goods at the port of new york in the United States is called CNF NEWYORK. In this way, in addition to the FOB price, the freight and miscellaneous expenses of the goods shipped to new york in the United States are added. ?

simple formula: CNF = FOB+ ocean freight?

3. Deliver the goods at foreign docks, and at the same time, buy insurance for the goods to avoid damage on the way: it is called CIF

It is called CIF NEW YORK to agree to deliver the goods at new york port. This way is to add a little insurance premium on the basis of CNF price. The cost of insurance premium is determined by the insurance company, which varies slightly according to the type of goods and the place of delivery. ?

simple formula: CIF = FOB+ ocean freight+insurance premium

each model stipulates the obligations of the buyer and the seller in certain terms of trade. The terms used to describe this obligation are called trade terms.

The terms of trade expressed in trade terms are mainly divided into two aspects:

1. Explain the price composition of commodities, and whether it includes the main ancillary expenses other than costs, namely freight and insurance;

2. Determine the delivery conditions, that is, explain the division of responsibilities, expenses and risks borne by the buyer and the seller in the delivery of goods.

trade terms are essential to express prices in international trade.

the use of trade terms in the quotation clearly defines the responsibilities, expenses and risks that both parties should bear in the delivery of goods, and explains the price composition of goods. Thereby simplifying the procedures of transaction negotiation and shortening the transaction time.

because the international practice of specifying trade terms gives a complete and exact explanation of the obligations that the buyer and the seller should bear, some disputes that may arise in the performance of the contract due to different understanding of the terms of the contract are avoided.

Extended information:

Some countries encourage the use of CIF terms for export and FOB terms for import, which are insured or transported by domestic insurance companies and carriers.

According to the interpretation of the 2 General Rules, the term FOB is only applicable to maritime and inland waterway transportation. FOB (... named port of shipment)

"FOB (... named port of shipment)" refers to the risk when the goods cross the ship's rail at the named port of shipment (according to INCOTERMS 21, that is, Incoterms). FOB terms require the seller to go through customs clearance procedures for goods export.

this term is only applicable to sea or inland waterway transportation. If the parties do not intend to deliver the goods on board, the FCA term should be used.

Reference: Baidu Encyclopedia -FOB (trade terms)