FOB Buyer - designated Freight Forwarder in Foreign Trade: Risks and Prevention Strategies

Goods transportation occupies a core position in theforeign tradeprocess, involving key factors such as freight and control of property rights, which directly affect the interests of export enterprises. Especially under the FOB trade term, the operations of the freight forwarders designated by the buyer bring a series of risks.

Under the FOB trade term, the buyer usually chooses a freight forwarding company with which it has a good cooperative relationship to obtain freight discounts, centralized shipments, etc. The responsibilities of the buyer and the seller are divided at the point when the goods cross the ships rail, that is, after the seller delivers the goods to the shipping company, the booking of shipping space and the freight should be paid by the buyer in principle.

Due to special relationships between buyers and designated freight forwarders, operational or moral hazards may exist, such as release without original bill of lading situations. Such violations may cause exporters to lose control of goods, even facing loss of both payment and goods. Although legal action can be taken against forwarders internationally, the process is time-consuming and costly.

(1) Be cautious in choosing trade terms:Especially when negotiating with new buyers, enhance the control over the goods.

(2) Strive to obtain the master bill of lading:Compared with the house bill of lading, the master bill of lading has a stronger property - right - certificate attribute.

(3) Strengthen legal constraints:Understand the terms of the transportation contract, especially those related to the rights and interests of export enterprises, to protect their own rights and interests.

(4) Utilize export credit insurance tools:Understand the creditworthiness of buyers and freight forwarders, and purchase export credit insurance to safeguard their own rights and interests.

Against the backdrop of a severe global economic situation, export enterprises should combine their own transaction characteristics with those of the buyers, adopt effective prevention strategies, and ensure the stability of transactions and minimize risks.