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About FOB & FCA - INCOTERMS. Advantage and Disadvantage from exporters & importers point of view. - YouTube
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this time let's have a look at fo be
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from an exporters and an importers point
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risk management and cost are keys for
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the trade business for example if we an
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experienced trading company are
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importing we will use fo B for countries
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which have regular trade business
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arrangements CFR is used by countries
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who do not have a regular trade business
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arrangement it is very important to
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understand the meanings in the use of
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these two trading terms based on your
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business experience now we will talk
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about advantages and disadvantages of fo
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B firstly let's look at the term of F OB
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f OB is a trading commission of cost and
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risk responsibilities that change from
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one side to the other once the cargo is
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the deck of the vessel of the exporting
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port F OB is a short form of free on
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board and the board in this instance
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refers the vessel deck f OB means once
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the cargoes are on the deck of the
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vessel the exporters become free from
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responsibilities and the responsibility
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moves to the importers the name of the
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exporting port is displayed after F will
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be on an invoice for example f OB Tokyo
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f OB Tokyo means once the cargo exported
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to Tokyo is on the deck of the vessel of
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the exporting port the responsibility
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will move from exporters to importers as
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responsibilities moves from exporters to
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importers the risk to exporters is
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reduced however it is still less
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responsibility for importers than
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ex-works f OB requires a certain level
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of business experience and knowledge of
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our sketch method let's look at F Oh be
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from an exporter point of view logistics
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arrangements that are required for f OB
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exporters our arrangement of domestic
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trucks and customs clearance for
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exporters point of view f OB is a
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lighter business condition with reduced
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responsibility requiring exporters to
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take the responsibility up to an
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including the exporting port from this
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point the shipping arrangement is
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entrusted to the importers now let's
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look at F Oh be from an importers point
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of view if you are importing cargo
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regularly from a specific importing
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country you can take advantage by using
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fo B as this will enable you to
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negotiate C for a cost reduction with a
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freight forwarder if you operate a
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business with a company that export
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cargoes in bulk it is better to use CFR
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than fo B an experienced person who
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deals with high volumes is more cost
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effective and they will be able to make
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an arrangement smoothly you also need to
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confirm that the freight forwarder you
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choose to deal with has strength and
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experience in logistics from exporting
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countries as previously explained a
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freight forwarder who imports from
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specific countries will have more
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options and can't make an arrangement
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smoothly otherwise you will need to
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consider changing the freight forwarder
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or negotiating alternative trade terms
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for example our company regularly
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imports cargoes from Japan and China to
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Thailand so we have some business
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advantages however since we do not
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regularly import from Africa and South
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America the cost is higher and we are
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unfamiliar with their business practices
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in this case we offer our customer CFR
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rather than fo between Crees exporters
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benefit now let's look at FCA which you
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should remember with fo B as explained
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with fo B cost and risk responsibilities
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move from sellers to buyers once the
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cargoes around the deck of the vessel
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with FCA cost and risk responsibilities
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move from sellers to buyers a designated
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place before cargoes are on the deck of
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the vessel it could be CY or appointed
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warehouse the benefits of FCA are that
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it has less risk responsibilities at the
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port compared to fo B we check fo B
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today
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fo B the responsibility move from an
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exporters to importers once the cargoes
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are on the deck of the vessel of
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exporting port it is important for both
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exporters and importers to understand fo
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B when requesting quotes and business
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when using fo betrayed you should
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consider advantages and disadvantages of
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the terms before contracting out
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in this channel I explained about the
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technical term and job description in
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logistics if you are interested in
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logistics work or if you already work in
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the logistics industry I believe that
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this channel will be a good support for
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your job if this time video gets a good
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support for your understanding
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please subscribe press good or comment
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anything well see you next time
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