Under the IncotermsВ® 2020 rules FOB is inappropriate for container shipments because the cargo is given to the carrier at a place some distance from the port, such as a container yard or even the sellerвЂ™s premises. Often where there is a letter of credit involved the seller is shown on the bill of lading as the shipper, in which case the seller would be wise to inform themselves of the additional liabilities they might be taking on under the terms and conditions of the bill of lading. The seller will most likely require at least a mateвЂ™s receipt or some other form of evidence of export such as a copy of the bill of lading for their VAT/GST purposes. The buyer contracts for carriage therefore the shipper on the bill of lading should be the buyer not the seller. The seller must carry out all export formalities and the buyer must carry out import formalities. Cost of carriage is payable by the buyer, the bill of lading usually indicating вЂњfreight collectвЂќ. вЂњOn boardвЂќ is no longer defined as placing the goods вЂњacross the shipвЂ™s railвЂќ and in fact is not defined any further as it will be a matter for the contract to specify depending on the nature of the goods. From that point on risk of loss or damage to the goods transfers to the buyer. This trade term goes back to the days of sailing ships, and in the IncotermsВ® 2020 rules, as in previous versions, requires the seller to place the goods on board the vessel nominated by the buyer.

*NEW* Delivered at Place Unloaded (DPU).International Trade Professionals Programme 2021.

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