Also, the buyer still needs to pay additional fees. There is always a problem of miscommunication because the buyer is in touch with people who act on behalf of the seller. In this case, the seller determines the rules and chooses a freight forwarder, which can end up charging more to the buyer, all for the sake of better profit. Although these two are similar, CIF is often considered a more expensive option. They both specify who is in charge and where this process starts and ends. CIF and FOB do share some similarities: both are shipping agreements that hold information about freight origin and destination. Īnother option that is often used for international shipping agreements is also CIF (Cost, Insurance and Freight). Freight prepaid and charged back: In cases where the documentation states FOB Origin, the shipper will not pay for the cost of shipping, but instead adds the freight cost to the existing invoice and the receiver pays for shipping by paying the more expensive bill.Freight collect and allowed– In cases where FOB Destination is indicated in the documentation, freight collect and allowed means that the shipper takes partial responsibility, but the receiver deducts the freight charges from the shipper.Conversely, in cases where the documentation states Freight Origin, Freight Collected implies that the receiver bears all of the responsibility Freight collect – if the documentation states FOB Delivery, the receiving party is responsible for all costs when the delivery is successful. If the documentation states FOB destination, the shipper takes the responsibility for everything until the freight reaches the destination.
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