The Wholesale Forums

[guru4us]

L/C-"Letter of credit" means a document issued by a bank stating its commitment to pay someone a stated amount of money on behalf of a buyer so long as the seller meets very specific terms and conditions. Letters of credit are more formally called documentary letters of credit.

L/I-"Letter of intent" means A document that describes the preliminary understanding between parties who intend to make a contract or join together in another action.

T/T- "Telegraphic transfer/wired money" This basically means you wire them money through your bank to their bank account and they ship out your order after they receive confirmation. It usually takes 48hrs, for it to be posted to their account.

Invoice- A document identifying the buyer and seller; includes all relevant information such as number, date, shipping date, mode of transport, etc.

Manifest- Lists produced by the loading port agents with a detailed breakdown of all cargo to be loaded including Bill of Lading number, weight, volume, shippers and receiver’s names, etc.

FOB-"Free on Board" means that the seller is responsible for delivering goods to the port of loading agreed in the contract and for loading them onto the ship nominated by the buyer. FOB’s usually refer to the loading/terminal costs.
The seller fulfils his obligation to deliver the goods when the goods have passed over the ship's rail.

will add more soon

[CFL]

I thought FOB was Freight Onboard

[Anthony]

You can add these if you like harry....

MOV - Minimum order value

MOQ - Minimum order quantity

POD - Proof of delivery

COD - Cash of delivery

I'll let you put the detailed descriptions in....

[guru4us]

sorry my mistake CFL, I'll change it. Thanks for letting me know

[guru4us]

Thanks for those Anthony

[Pete]

FOB actually means Free On Board. It can be followed with a port or place.

It's real purpose is to transfer responsibility of the goods from the seller to the buyer.

While it does sometimes refer to when a foreign seller places the goods on a ship (or plane), it can also relate to shipping within the same country.

Using a name that is in the news quite a bit lately, let's take the ABC Manufacturing Company in Leeds. Their terms could be: FOB Leeds, indicating that when to goods went over the tailgate of the truck that the responsibility shifted to the buyer. In other words, once it left their loading dock, it's yours.

Sometimes the terms are FOB Destination, meaning the seller will take responsibility until you receive the goods. Often this is when the seller delivers by their own fleet of trucks.

Anyhow, it's not just an international term, but one used generally in commerce and it simply means - "Don't call us if you have a problem after this point."

[guru4us]

Thanks Pete

[mughalstores]

Originally Posted by pete

FOB actually means Free On Board. It can be followed with a port or place.

Yup he's right.

[guru4us]

I thought i should add some more information
There are basically 4 groups of shipping terms

Group C, Main Carriage is paid by seller
CIP- Carriage and Insurance Paid to...location
CIF- Cost, Insurance and Freight
CFR- Cost and Freight
CPT- Carriage Paid to...location

Group D which relates to arrival
DAF- Delivered at Frontier
DDP- Delivered Duty Paid
DES-Delivered ex Ship
DEQ-Delivered ex Quay
DDU-Delivered Duty Unpaid

Group E, Departure
EXW - Ex Works. Im not sure exactly that is

Group F which relates to main carriage without payment
FCA - Free Carrier
FAS- Free alongside ship
FOB- Free on board (more about it above)

I could have missed a few terms so please do feel free to add them. More information can be found about them if you search google for INCOTERMS.
The terms used most often when goods are moved by ocean are FAS, FOB, CIF and CFR

If you need any help with those terms, post here and me or someone else with more experience can help.

[guru4us]

Another Tip: if your shipping terms are CIF, then its customary to insure for the CIF value of a shipment an extra 10%.