How do Importers benefit under FOB delivery rules?
Let us discuss here the advantages for importer when agreeing contract of carriage as FOB.
Here are the 12 benefits for importers under FOB delivery terms:
01. Comparatively with most of the delivery rules to move goods from seller’s place to buyer’s place, the risks of buyer is high thereby he keeps more profit margin against the export sales under FOB delivery terms. This is an advantage for importer under FOB delivery terms in import export business.
02. One of the main advantages for importer under FOB terms of delivery is that when handling main carriage, import clearance, import govt. rules and regulations, the buyer strengthens his experience in such areas which can be utilized for similar transactions with same supplier or with different sellers ; naturally strengthens the importer’s volume of business.
03. The FOB delivery rules allows the buyer to hold complete control over main carriage, contracting sea freight with shipping carriers thereby ultimate strength to negotiate ocean freight and services. This is one of the benefits for importer under FOB terms contracted in export import trade.
04. Another advantage for importer under FOB terms is that the government rules and regulations of pre carriage need not be known for a buyer under FOB terms of delivery as those responsibilities are undertaken by the seller.
05. Under FOB, the buyer need not worry about export customs clearance process at exporter’s country, export documentation, export taxes if any. This is another advantage for importer if delivery terms are on FOB basis in import export business. This is another benefit for importer under FOB delivery rules.
06. One of the other merits for importer if the terms of delivery is FOB is that ; once the goods are loaded to the vessel, the buyer takes care of total movement of goods and safety of goods is secured by the importer in an export import business.
07. The cost calculation against import customs clearance, import duties, import documentation and on carriage to final destination of buyer can be assessed by him under FOB terms of delivery rules, as the importer undertakes all such activities. This is an advantage for importer under FOB delivery terms.
08. Under FOB terms of delivery, the selection of main carriage is done by importer thereby; the control over ocean freight is with the buyer. This is a merit for buyer in export import business.
09. Other advantage for buyer under FOB terms is that the cost of movement of goods from the load port to final destination can be ascertained by importer under FOB which helps him to do further business transactions with same supplier or suppliers of similar delivery terms.
10. Since the ocean freight is contracted by the importer, he holds control over releasing Bill of Lading and shipping tracking information from the shipping carrier under FOB terms. This is another advantage for buyer.
11. One of the other benefits for importer is that under FOB terms, since the risks and costs are covered by seller at his country, it is comparatively easier to handle rest of the movement of goods in buyer’s country.
12. Under FOB terms, importer is responsible to unload the goods and thereby the importer can ensure the safety of goods without damage when unloading the goods at final destination. This also can be treated as another advantage for buyer under FOB terms of delivery in international business.
The above information is about advantages to importer under FOB delivery terms.
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