Documents required for payment using L/C for trade under FOB
Post 42 of 92
Replying to [kai1]:
For CIF shipment you ask for BL showing goods on board "freight prepaid", whereas for FOB shipment you still ask for BL showing goods on board "freight to pay".
For CIF shipment you ask for BL showing goods on board "freight prepaid", whereas for FOB shipment you still ask for BL showing goods on board "freight to pay".
28 Feb 2007 04:27
Post 45 of 92
Replying to [kai1]:
We can discuss this point three ways i.e. FOB for LC Payment, FOB for Advance Payment and FOB for CAD Payment.
Normally, whatsoever the case may be, the seller prepares full set of documents to facilitate the buyer, to ensure smooth payment processing and to make long term business relations with the buyer.
In case of FOB against LC Payment, the seller prepares full set of documents as described in the LC to safeguard prompt release of his payment after shipment is on board.
For FOB against CAD Payment, again it is in the interest of the seller to prepare full set of documents to receive the payment as per agreement between the seller and the buyer.
Even if it is FOB against advance payment where there is no risk of payment, the seller prepares full set of documents.
However, the cost of documents may differ in above cases as under:
If shipment term is FOB but the seller has no forwarding agent in country of the buyer, the seller will prepare all the documents through his own freight forwarder and will also bear following cost:
Trucking cost upto the port of loading - to seller's forwarding agent
Custom clearance to seller's forwarding agent
Fumigation - to seller forwarding agent
Container Placement Charges (if FCL cargo) - to the shipping line
Bill of Lading / Airway Bill Charges - to the shipping line / airline
the seller will pay
the ocean/air freight
THC at the port of loading
all expense at the port of discharge
and if the buyer has his own forwarder in country of the seller, the seller will prepare all shipment documents and will bear following cost:
Trucking Cost upto port of loading
other all charges mentioned above are on account of the buyer. It is advisable to make the understanding for shipment documents charges during the negotiation before shipment
In all cases, the seller will prepare following documents:
Commercial Invoices
Packing List
Certificate of Origin (if required)
Fumigation Certificate (if required)
Bill of Lading (through the shipping line)
any other certificate required by the buyer
The above documents may and may not be required to get attested from Chamber of Commerce of the Exporter and Embassy of the Importer in country of the Exporter, as and when required.![[em47]](http://img.alibaba.com/images/eng/style/icon/emoticons_ship.gif)
We can discuss this point three ways i.e. FOB for LC Payment, FOB for Advance Payment and FOB for CAD Payment.
Normally, whatsoever the case may be, the seller prepares full set of documents to facilitate the buyer, to ensure smooth payment processing and to make long term business relations with the buyer.
In case of FOB against LC Payment, the seller prepares full set of documents as described in the LC to safeguard prompt release of his payment after shipment is on board.
For FOB against CAD Payment, again it is in the interest of the seller to prepare full set of documents to receive the payment as per agreement between the seller and the buyer.
Even if it is FOB against advance payment where there is no risk of payment, the seller prepares full set of documents.
However, the cost of documents may differ in above cases as under:
If shipment term is FOB but the seller has no forwarding agent in country of the buyer, the seller will prepare all the documents through his own freight forwarder and will also bear following cost:
Trucking cost upto the port of loading - to seller's forwarding agent
Custom clearance to seller's forwarding agent
Fumigation - to seller forwarding agent
Container Placement Charges (if FCL cargo) - to the shipping line
Bill of Lading / Airway Bill Charges - to the shipping line / airline
the seller will pay
the ocean/air freight
THC at the port of loading
all expense at the port of discharge
and if the buyer has his own forwarder in country of the seller, the seller will prepare all shipment documents and will bear following cost:
Trucking Cost upto port of loading
other all charges mentioned above are on account of the buyer. It is advisable to make the understanding for shipment documents charges during the negotiation before shipment
In all cases, the seller will prepare following documents:
Commercial Invoices
Packing List
Certificate of Origin (if required)
Fumigation Certificate (if required)
Bill of Lading (through the shipping line)
any other certificate required by the buyer
The above documents may and may not be required to get attested from Chamber of Commerce of the Exporter and Embassy of the Importer in country of the Exporter, as and when required.
28 Feb 2007 21:31
Post 46 of 92
Replying to [kai1]:
You can pay after you see copy of B/L. If factory don't agree, I think you can ask factory to ship by the shipping company you appointed.
It will be safer for you.![[em1]](http://img.alibaba.com/images/eng/style/icon/emoticons_smile.gif)
You can pay after you see copy of B/L. If factory don't agree, I think you can ask factory to ship by the shipping company you appointed.
It will be safer for you.
28 Feb 2007 23:29
Post 47 of 92
Replying to [kai1]:
FOB refers to 'Free On Board'. This term is only applicable to delivery by a vessel at the port of shipment in the country of the seller. This entails that the buyer is is responsible to arrange for the shipment i.e. appointment of the carrier from the port of shipment to the port at destination.
In this regards, the required document is still Bill of Lading. Take note, that the freight notation should read as 'Freight to collect' instead of ' Freight prepaid'.
If you are not familiar in arranging the vessel, you may contact your local forwarder.
You must also be aware that the insurance of the cargo must be procured by you in your country.
Buying on FOB is customary and widely practiced. This is to avoid the outflow cost of intangible services such as insurance.
Sometimes it is cheaper to procure cargo insurance in the country of the buyer rather than country of the seller.
FOB refers to 'Free On Board'. This term is only applicable to delivery by a vessel at the port of shipment in the country of the seller. This entails that the buyer is is responsible to arrange for the shipment i.e. appointment of the carrier from the port of shipment to the port at destination.
In this regards, the required document is still Bill of Lading. Take note, that the freight notation should read as 'Freight to collect' instead of ' Freight prepaid'.
If you are not familiar in arranging the vessel, you may contact your local forwarder.
You must also be aware that the insurance of the cargo must be procured by you in your country.
Buying on FOB is customary and widely practiced. This is to avoid the outflow cost of intangible services such as insurance.
Sometimes it is cheaper to procure cargo insurance in the country of the buyer rather than country of the seller.
01 Mar 2007 01:02
Post 48 of 92
Replying to [kai1]:
absoulutely you can ask for BL in case you buy in FOB base because in all cases the seller or the shipper can get this BL because there is a clause in any BL include the terms of freight payment like prepaid or collect. so the shipper can get the BILL OF LADING in all cases and send it to you or apply it with the other documents to the bank.
thank you
yasser omar
absoulutely you can ask for BL in case you buy in FOB base because in all cases the seller or the shipper can get this BL because there is a clause in any BL include the terms of freight payment like prepaid or collect. so the shipper can get the BILL OF LADING in all cases and send it to you or apply it with the other documents to the bank.
thank you
yasser omar
01 Mar 2007 13:24
Post 49 of 92
Replying to [yasseromar]:For CIF shipment you ask for BL showing goods on board "freight prepaid", whereas for FOB shipment you still ask for BL showing goods on board "freight to pay".i think the same with this person
01 Mar 2007 16:18
Post 50 of 92
Replying to [kai1]: if the buyer need CNF shippment and factory will supply only on FOB basis so we as mediator how to handle it, i mean how we bond to buyer that shippment which you committ with us with in time for avoid to shipping demurage and how to bond buyer that discharge should be in given time
02 Mar 2007 11:16
Post 51 of 92
Replying to [rakhi]: we are not importer, we are broker if we will get tranferable, divisible L/C in our A/C and transfer one L/C to supplier and one to shipping company so how should we bond to supplier that supply should be in time? and how should we bond to buyer that discharge will be in time to avoid demurage from both side
02 Mar 2007 11:20