Freight must be payable by the applicant

dulari · Post by **dulari** » Sun Mar 14, 2010 12:13 pm

Dear blosom cdcs friends for 2010

which incoterms indicates that freight must be payable by the applicant
Please specifiy in details

Dulari
mostafag2565@yahoo.com

iLC · Post by **iLC** » Wed Mar 17, 2010 8:48 am

you need to reconsider the idea of INCOTERM. it talks about the obligation of the seller and precisely (and not comprehensively) at what point seller delivers the goods the buyer.

in an FOB contract, the seller's duty is to put the goods on board. thats all. he is not responsible for the freight and does not bother who is paying the freight. so the only option remains for the buyer to take the goods to his own premises is to pay the freight.

other comments appreciated

Jackie · Post by **Jackie** » Wed Mar 17, 2010 5:54 pm

Hello

The best publication for your to understand about Incoterms is the ICC official Incoterm 2000 book.

Thanks jackie

Negotiator · Post by **Negotiator** » Sat Mar 20, 2010 9:35 pm

Dear all,

Another question struck me while it is not in line with Dulari's question.

In the L/C transaction, do you think following situations can happen?
1) The credit stiplates the INCOTERM as "FOB" in goods description field, but it requires the transport document to evidence FREIGHT PREPAID.
2) The credit stiplates the INCOTERM as "CIF" in goods description field, but it requires the transport document to evidence FREIGHT COLLECT.

I have thought that such credits were badly-issued, and recommended to obtain amendment when someone asks me what the beneficiary should do in this situation.

Please give me your opinions.

Thanks and Regards.
Lee

shahriar · Post by **shahriar** » Sun Mar 21, 2010 9:31 pm

i think its possible. INCOTERMS just say who is going to pay the freight; buyer or seller. it has nothing to do with when its gonna paid. if the INCOTERM is FOB, its still possible for the transport document to show Freight Prepaid. same applies for CIF as well. for this reason ISBP says

Applicants and issuing banks should be specific in stating the requirements of documents to show whether freight is to be prepaid or collected.

Negotiator · Post by **Negotiator** » Mon Mar 22, 2010 2:46 pm

Dear Shahriar.

I got to think again. Such cases may happen, as you said.

Many thanks for your good explanation!

Lee

Jackie · Post by **Jackie** » Mon Mar 22, 2010 9:08 pm

Dear all

I have seen this many times when a l/c states CFR, but as the importer has a preferential rate with the shipping line and have a long standing relationship with the exporter, the l/c may be claused: b/lading to show ''freight to be paid by importer" where importer is shown as their name. This may also be used on a back to back transaction where the incoterms do not mirror each other.

Thanks Jackie

jmitra · Post by **jmitra** » Mon Mar 22, 2010 10:17 pm

whether transport document to show freight prepaid or collect depends on the contract of carriage which has very little to do with incoterm. please refer to introduction of incoterm

It appears that two particular misconceptions about Incoterms are very common. First, Incoterms are frequently misunderstood as applying to the contract of carriage rather than to the contract of sale. Second, they are sometimes wrongly assumed to provide for all the duties which parties may wish to include in a contract of sale.

Freight must be payable by the applicant

Freight must be payable by the applicant

none

Freight/incoterms

Another question

FOB and CIF

Thanks!

Freight payable by the applicant

contract of sale vs contract of carriage