When dealing with Free On Board (FOB) shipments, sellers have several responsibilities to ensure a smooth transaction. Here’s a detailed guide on what sellers need to do under FOB terms:
1. Prepare Goods and Documents
- Ensure Goods are Ready: Sellers must ensure that the goods are prepared and ready for shipment.
- Organize Necessary Documents: Sellers need to compile all necessary documents, such as commercial invoices and any other documents specified in the contract, to prove that the goods meet the agreed conditions.
2. Inspection and Packaging
- Quality and Quantity Check: Conduct thorough inspections to ensure the quality and quantity of the goods are correct.
- Proper Packaging: Package the goods securely and attach necessary labels to ensure safe arrival at the destination. Additionally, fulfill all legal inspection requirements.
3. Obtain Export Permits
- Complete Export Formalities: Ensure all export procedures are completed according to official regulations.
- Acquire Export Licenses: Obtain the necessary export licenses and complete customs declarations to export the goods legally.
4. Domestic Transportation and Delivery
- Transport to Port: Arrange for the goods to be transported from the warehouse to the port or vessel specified by the buyer.
- Risk Transfer: Once the goods are on board, the risk transfers to the buyer.
5. Bill of Lading and Customs Clearance Documents
- Obtain Bill of Lading: Secure the bill of lading from the shipping company, which serves as proof that the goods have been handed over to the carrier and aids the buyer in customs clearance.
- Provide Additional Documents: Supply any additional required documents, such as certificates of origin.
6. Notify the Buyer
- Update on Shipment Status: Keep the buyer informed about the status of the goods. Notify them to prepare for receipt if the goods are delivered on time.
- Communicate Delays: Inform the buyer immediately of any delays or issues to maintain transparency.
