【Question】
Under the FOB contract, we will ship from Japan to South Korea. We have received an estimate from the shipping company with the following contents.
Sea Freight ￥200/cbm
THC Fee ¥800/cbm
CFS Fee ￥1300/cbm
Lss Fee ￥500/cbm
RR Fee ￥3500/cbm
Bill ￥3500/set
Trucking Fee ￥3000/shipment
What does the consignee pay for other than Sea Freight?
【Answer】
With FOB (Free on Board), the contract is completed when the cargo is loaded onto the vessel designated by the buyer (importer) at the export port, and the freight and insurance premiums are the responsibility of the buyer.
And then, this estimate is,
The consignee (importer) pays Lss Fee1 and RR Fee2 in addition to Sea Freight. Bill is probably the cost of issuing BL, so Bill is borne by the shipper (exporter).
Now that I have finally learned the Incoterms, I am overwhelmed by the number of cost items, which is the difficult part of trade affairs. .
There is no choice but to remember while googling, and it is often difficult to judge whether the addition is possible even in customs declaration.
If you don’t understand even after studying, please contact me, a trade challenge consultant!
Click here for Incoterms
Note 1 Lss Fee → Low Sulfur Fuel Surcharge. Based on the International Maritime Organization Convention, regulations on sulfur oxide emissions are enforced. For this reason, the cost incurred by the shipping company to implement equipment that can reduce emissions.
Note 2 RR Fee → Rate Restoration (Fare Restoration) To match the fare rate with the market price