Americas 2011 Custom of the Port Agenda Panelists What is Custom of the Port What does Incoterms say Port perspectives Carrier perspective Solutions QuestionsAnswers Custom of the Port ID: 286754
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Slide1
Breakbulk Americas 2011
Custom of the PortSlide2
Agenda
Panelists
What is Custom of the Port?
What does
Incoterms
say?
Port perspectives
Carrier perspective
Solutions
Questions/AnswersSlide3
Custom of the Port
When does FOB not mean FOB?
How does Custom of the Port affect buyer and seller obligations?
Why do
Incoterms
not solve Custom of the Port issues? Slide4
So what is Custom of the Port?
FOB sales contract - seller obligation to deliver on board the vessel, buyer contracts for carriage.
Local practice (Custom of the Port) - decides how stevedoring and other port costs are distributed to seller or buyer. Practice varies between ports or even within a port. This distribution of costs between seller or buyer may conflict with standard FOB
Incoterms
seller/buyer allocation of costs.
Result – buyer surprise and most likely a dispute! Slide5
What does Incoterms say?
“The custom of the port will decide the extent to which loading costs under FOB should be distributed between seller and buyer. If this is known to both parties, no difficulties should arise.”
But –Slide6
Case : Antwerp FOB-conditions
Legal aspect:
Before : international sales-contract based on
either Incoterms 2000 OR Local Practice
Now : international sales-contract based on
Incoterms 2010, automatically refers to
prevailing Local Practice (CoP)
Slide7
Case : Antwerp FOB-conditions
Practical:
FOB-seller allowed to deliver goods ‘in the
perimeter’ of the vessel, in good condition
Extended free time for conventional cargo:
up to 42 days free storage
No interference with:
Transfer-costs from perimeter till vessel
Loading of the vessel
Lashing/securing of the cargo
Additional advantage ‘Antwerp conditions 1951’
for delivery ex barge Slide8
Case : Antwerp FOB-conditions
Practical:
FOB-buyer negotiates Liner-terms with Shipping
Line
With Liner-terms, costs & risks are clearly
defined & included in Sea-Freight:
Transfer-costs from perimeter till vessel
Loading of the vessel
Lashing/securing of the cargoSlide9
Case : Antwerp FOB-conditions
Attention:
Export documentation-cost (incl. customs) for
FOB-seller’s account !
Transfer of risk from FOB-seller to FOB-buyer as
from establishment FOB-receipt !
FOB-buyer preferably appoints his own agent
(other than Ship’s Agent or FOB-seller’s Agent)
in the port to supervise and to establish FOB-
receipt, in order to avoid possible conflict of
interest !Slide10
Solutions
1-If FOB sales contract, buyer & seller must know the Custom of the Port at the intended loading terminal,
prior to issuing the sales contract.
Incoterms
:
“
A buyer who does not know the custom of the port in the seller’s country should be cautious when using FOB and should require a precise stipulation concerning the loading costs
.”
Example: FOB
Incoterms
2010 Port of New York, Amos Terminals. All landside and vessel loading costs and risk for seller’s account, notwithstanding custom of the port.
2
- Buy/sell FASSlide11
Custom of the Port
Questions/AnswersSlide12
Custom of the Port
When does FOB not mean FOB?
How does Custom of the Port affect buyer and seller obligations?
Why do
Incoterms
not solve Custom of the Port issues?