{"id":1303,"date":"2017-02-13T14:13:47","date_gmt":"2017-02-13T07:13:47","guid":{"rendered":"http:\/\/www.vtrlogistics.com.vn\/?p=1303"},"modified":"2017-02-13T14:13:47","modified_gmt":"2017-02-13T07:13:47","slug":"why-you-should-always-choose-fob-shipping-with-your-supplier-2","status":"publish","type":"post","link":"https:\/\/www.vtrlogistics.com.vn\/?p=1303&lang=en","title":{"rendered":"Why You Should Always Choose FOB Shipping With Your Supplier?"},"content":{"rendered":"<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">We are assuming you have learned the basic rules of Incoterms, now it\u2019s time to move forward.<\/span><\/div>\n<blockquote class=\"_2cuy _509u _2vxa\"><p><span style=\"color: #000000;\">Which incoterm (aka shipping term, freight term or trade term) should I choose?<\/span><\/p><\/blockquote>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">An importer need to look into the options of buying the goods under the terms that are more favorable to his or her expenses. We suggest you should <span class=\"_4yxo\">always choose FOB shipping<\/span> between you and your supplier. But why?<\/span><\/div>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">The short answer is by doing this, it will greatly reduce your shipping costs and give you more control over the shipment.<\/span><\/div>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">Let\u2019s list the most commonly used terms first:<\/span><\/div>\n<ul class=\"_5a_q _5yj1\" dir=\"ltr\">\n<li class=\"_2cuy _509q _2vxa\"><span style=\"color: #000000;\">EXW<\/span><\/li>\n<li class=\"_2cuy _509q _2vxa\"><span style=\"color: #000000;\">FOB<\/span><\/li>\n<li class=\"_2cuy _509q _2vxa\"><span style=\"color: #000000;\">CFR or CIF<\/span><\/li>\n<li class=\"_2cuy _509q _2vxa\"><span style=\"color: #000000;\">DAP<\/span><\/li>\n<li class=\"_2cuy _509q _2vxa\"><span style=\"color: #000000;\">DDP<\/span><\/li>\n<\/ul>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">We can divide them into three types.<\/span><\/div>\n<ul class=\"_5a_q _5yj1\" dir=\"ltr\">\n<li class=\"_2cuy _509q _2vxa\"><span style=\"color: #000000;\">EXW \u2013 You only pay the goods value.<\/span><\/li>\n<li class=\"_2cuy _509q _2vxa\"><span style=\"color: #000000;\">FOB \u2013 You pay the goods value and inland transportation cost.<\/span><\/li>\n<li class=\"_2cuy _509q _2vxa\"><span style=\"color: #000000;\">CFR, CIF, DAP, DDP \u2013 You pay the goods value, inland transportation cost, and sea\/air freight cost (or more)<\/span><\/li>\n<\/ul>\n<h3 class=\"_2cuy _50a1 _2vxa\"><span style=\"color: #000000;\">1. NEVER EXW.<\/span><\/h3>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">Quite a few buyers come to us and ask our comments about choosing EXW for the max control of the goods. We strongly don\u2019t suggest this term for any sourcing, not including small samples.<\/span><\/div>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">If you have ever looked into the meaning of EXW, you may change your decision. When the truck arrived at the warehouse or the manufacturer, the supplier even has no obligation to loading on it. Not mentioning the customs declaration at the loading port.<\/span><\/div>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">All export clearance documents and procedures are included in the FOB price. Importers are wise to avoid hassle and simply stick to FOB.<\/span><\/div>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">Yes, we can do all the stuff for you if you insist on EXW. But clearly it\u2019s costly and time consuming. Things should be easier.<\/span><\/div>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">So again, NEVER EXW.<\/span><\/div>\n<h3 class=\"_2cuy _50a1 _2vxa\"><span style=\"color: #000000;\">2. Freight cost is cheaper when FOB shipping.<\/span><\/h3>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">As we know, CIF or CNF means your supplier would arrange the cargo to your destination port or airport, while DAP or DDP means to your destination place.<\/span><\/div>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">The supplier told you the logistics cost, and you paid it. It is a more convenient way of international transportation, but you must realize that there\u2019s a big chance that you are paying a lot more to get the goods than you should.<\/span><\/div>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">So here\u2019s the question.<\/span><\/div>\n<blockquote class=\"_2cuy _509u _2vxa\"><p><span style=\"color: #000000;\">Why my supplier charges me more?<\/span><\/p><\/blockquote>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">Three cases.<\/span><\/div>\n<h3 class=\"_2cuy _50a1 _2vxa\"><span style=\"color: #000000;\">2.1 Some suppliers try to mark up the freight cost offered as an additional way of making profit.<\/span><\/h3>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">The first reason is easy understanding.<\/span><\/div>\n<h3 class=\"_2cuy _50a1 _2vxa\"><span style=\"color: #000000;\">2.2 Most suppliers quote you higher just in case.<\/span><\/h3>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">Most manufacturers are made-to-order. They need time to get the production done. They don\u2019t be sure about what\u2019s the shipping cost will be after 2 weeks or 1 month or much longer, when the goods are ready to delivery.<\/span><\/div>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">The total amount has to be settled down before that. So hundreds dollars added in reserve for future changes.<\/span><\/div>\n<h3 class=\"_2cuy _50a1 _2vxa\"><span style=\"color: #000000;\">2.3 Some suppliers quote you the same as they got, but the price itself is not the cheapest one.<\/span><\/h3>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">Suppliers get logistics cost, but they don\u2019t compare often. The price is very likely not the cheapest one. A professional cargo agent knows the carriers\u2019 advantage and can get cheapest price.<\/span><\/div>\n<h3 class=\"_2cuy _50a1 _2vxa\"><span style=\"color: #000000;\">3. FOB means the logistics solution will be better.<\/span><\/h3>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">We will quote the best price and provide more than one solution. Besides, special-purpose advice for you to check and decide easily. The response time to any delivery issues will be shorter, because you don\u2019t have to wait your supplier paraphrased.<\/span><\/div>\n<blockquote class=\"_2cuy _509u _2vxa\"><p><span style=\"color: #000000;\">Through experience and relationships with top-tier carrier partners, we negotiate the least cost rates available.<\/span><\/p><\/blockquote>\n<h3 class=\"_2cuy _50a1 _2vxa\"><span style=\"color: #000000;\">4. FOB means better control and work efficiently.<\/span><\/h3>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">You have better control of your cargo and your budget. The cost is always important and you will have a better chance of gaining a more competitive freight rate.<\/span><\/div>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">Using your own forwarding agent will help you obtain more accurate information in a timely manner. We can assist you better once a problem arises. The logistic partner you choose always works together with you for YOUR best interest.<\/span><\/div>\n<h3 class=\"_2cuy _50a1 _2vxa\"><span style=\"color: #000000;\">Wrapping Up<\/span><\/h3>\n<blockquote class=\"_2cuy _509u _2vxa\"><p><span style=\"color: #000000;\">If your shipment is small (less than 200 kgs or less than 1 cbm), EXW is better. For such a shipment, door-to-door courier is the best choice.<\/span><\/p><\/blockquote>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">Maybe you are new to international trade, we suggest FOB + to-door delivery for your trail order or small shipment. Because handling international logistics may be too detailed or complicated for a new importer.<\/span><\/div>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">If you have a good freight partner, hopefully us, always use FOB when negotiating with your supplier. No matter what your freight specialty or shipping needs, you will always find a best-in-class shipping solution that fits your budget and specifications with us.<\/span><\/div>\n<div class=\"_2cuy _3dgx _2vxa\"><span style=\"color: #000000;\">It\u2019s always the right time to complete our <a style=\"color: #000000;\" href=\"https:\/\/l.facebook.com\/l.php?u=http%3A%2F%2Fwww.vtrlogistics.com.vn%2Flien-he%2F&amp;h=ATM5_fZ0F6FqOUMhEYXFspTDfkKWkWxZC0etIKZ5qH5O-PALWZ3oEOnG-iRlrsGwujGrE846hUOA8DIHSjsjEC27i-WTvjKQE-EolMZ4qIUBPJydJd0jQGMFFl5H3EJVHW5O&amp;s=1\" target=\"_blank\" rel=\"nofollow\"><span class=\"_4yxr\">quote form<\/span><\/a> and start working together.<\/span><\/div>\n","protected":false},"excerpt":{"rendered":"<p>We are assuming you have learned the basic rules of Incoterms, now it\u2019s time to move forward. Which incoterm (aka shipping term, freight term or trade term) should I choose? An importer need to look into the options of buying the goods under the terms that are more favorable to his or her expenses. We &hellip;<\/p>\n","protected":false},"author":2,"featured_media":1216,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[95,75],"tags":[202,204,154],"acf":[],"_links":{"self":[{"href":"https:\/\/www.vtrlogistics.com.vn\/index.php?rest_route=\/wp\/v2\/posts\/1303"}],"collection":[{"href":"https:\/\/www.vtrlogistics.com.vn\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtrlogistics.com.vn\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtrlogistics.com.vn\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtrlogistics.com.vn\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1303"}],"version-history":[{"count":2,"href":"https:\/\/www.vtrlogistics.com.vn\/index.php?rest_route=\/wp\/v2\/posts\/1303\/revisions"}],"predecessor-version":[{"id":1305,"href":"https:\/\/www.vtrlogistics.com.vn\/index.php?rest_route=\/wp\/v2\/posts\/1303\/revisions\/1305"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtrlogistics.com.vn\/index.php?rest_route=\/wp\/v2\/media\/1216"}],"wp:attachment":[{"href":"https:\/\/www.vtrlogistics.com.vn\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1303"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtrlogistics.com.vn\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1303"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtrlogistics.com.vn\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1303"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}