S&H has been doing a lot of training on the Incoterms 2010 set since Sept 2010, mainly to UK businesses but also in the EU and couple of USA businesses. There has been a recurring issue with importers (predominantly retail importers) - they don't want to move from FOB to FCA for their containerised shipments coming to the EU/UK. It can be a hard sell to exporters too - think this is mainly down to the centuries FOB has been around (pre-Incoterms) - but eventually they do see the logic in the delivery point and risk passing once the goods are either loaded in the container at their premises or delivered to the buyer's agent at the port for LCL shipments.
Not so buyers ... why should we have extra risk and extra costs? why should we try to control a forwarder in another country? why should we change what is working? why should we renegotiate contracts with freight companies? why should we pay storage if the ship is loaded late? and a new one .... why should we have to get involved in port security issues in another country. They say the benefits as neglible but the aggravation it will cause costly and risky. These arguments are not new .. FOB hasn't been applicable to containerised freight for decades but a new set brings new debates!
The ICC have said that FOB "is not appropriate" for containerised freight - not that it can't be used; but this was just a legal nicety to allow the use in some small ports around the world that don't operate big container bases. Unfortunately if you weren't on the review committees you won't know that as they didn't make the concerns on using FOB for containerised freight clear. Would love comments.
See also topics on our main blog at: Strong & Herd
Comments related to business use for the new Incoterms 2010 set of international delivery terms. Some helpful tips included on the changes made by the ICC - the new Incoterms came into force January 2011. Share your comments with us.
The parties to the transaction, however, may stipulate in their contract of sale that the buyer will clear the goods for export.
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But why would you do that when you are shipping FOB or any other term. The buyer clearing the goods for export makes it a domestic sale and, if the supplier's country operates a VAT scheme, then they would have to charge local VAT on the sale. Unless an exporter receives adequate evidence of export then local taxes apply. The only Incoterms Rule that gives the buyer the obligation to clear the goods for export is ExWorks and this is a dangerous term. Now if you mean you can arrange for the buyer to pay the cost of export clearance in the freight charges then that is different - this happens with UPS, TNT, Fedex, DHL, etc as there is only one charge levied by them for the movement of goods and it goes to either the buyer or the seller.
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