I refer to the article headlined ‘Ship FOB – avoid China import service fee’ (FTW August 28, 2015). In the article it is noted that there is reference to FOB and CIF. Taking into consideration the fact that most cargo from China is containerised, these two Incoterms rules are not correct as they are not suitable for containerised cargo. A more appropriate rule would be FCA or CIP. You might say what is the difference? There is a lot as with the two rules which I have suggested the passing of the risk occurs when the cargo is handed into the care of the main carrier. This can occur when the container is collected from the seller’s warehouse where the container has been stuffed or when the container is delivered into the stack. With airfreight, it occurs when the cargo is delivered to the airline at the airport of departure. With FOB and CIF the risk occurs when the cargo is loaded and stowed on board the vessel. The cargo in a container is always handed to the carrier before loading on board. Furthermore, the FOB and CIF are definitely not suitable for airfreight and it is never possible for the buyer to be present and to be involved in the loading of an aircraft. This is partly due to the International Civil Aviation regulations whereby only accredited personnel are permitted on the air side of any airport. It is a great pity that we still have people using and referring to Incoterms rules which are inappropriate. Alexander Robertson, Robertson’s Cargo Consultancy
