Purchase MethodsPurchase Methods

Main : FOB or C&F/CIFMain : FOB or C&F/CIF

CIF/C&FCIF/C&F

Cost, Insurance, Freight

Cost & Freight

Shipping LineSelected by Seller

Seller can Manipulate delivery

to suit his Requirement

Buyer at the mercy of

Shipping line

FOBFOB

Free On Board

Shipping LineSelected by Buyer

Delivery controlledBy Buyer’s

Freight Forwarder

Choice of ShippingLine with buyer

Ex-Works

Shipment TypesShipment Types

Types of Shipment

Air FreightContainerFCL/LCL

Break Bulk

Liner Tramp

ContainerContainer

• FCL (Full container load)FCL (Full container load)

• LCL (Less than container load)LCL (Less than container load)

• Always on liner termsAlways on liner terms

Types of ContainersTypes of Containers

• 20’ & 40’ 20’ & 40’

• Standard container 20’ x 8’ x 8.5’ or Standard container 20’ x 8’ x 8.5’ or

40’ x 8’ x 8.5’ (Dimensions same for 40’ x 8’ x 8.5’ (Dimensions same for all types)all types)

• Open TopsOpen Tops

• Flat RacksFlat Racks

• Side doorsSide doors

Breakbulk : Liner VesselsBreakbulk : Liner Vessels

• Fixed SchedulesFixed Schedules

• Fixed routesFixed routes

• Cargoes can be booked without Cargoes can be booked without commitmentcommitment

• Flexibility in shipment planningFlexibility in shipment planning

• Calls major ports onlyCalls major ports only

• Size of the shipment not criticalSize of the shipment not critical

Breakbulk : Tramp VesselsBreakbulk : Tramp Vessels

• No fixed scheduleNo fixed schedule

• Vessels call subject to cargo inducementVessels call subject to cargo inducement

• Need minimum quantity per shipmentNeed minimum quantity per shipment

• Cargo booked on firm basis. Not Cargo booked on firm basis. Not delivering the cargo will attract dead delivering the cargo will attract dead freight. Late delivery of cargo will freight. Late delivery of cargo will attract detention.attract detention.

• Can call any port as required.Can call any port as required.

Bill of LadingBill of Lading

• Freight PrepaidFreight Prepaid

• Freight to payFreight to pay

• Ocean Bill of LadingOcean Bill of Lading

• Forwarder’s bill of ladingForwarder’s bill of lading

• ““Clean on Board”Clean on Board”

• LC requirementsLC requirements

Landed CostLanded Cost

• Purchase Price (FOB)Purchase Price (FOB)

• FreightFreight

• InsuranceInsurance

• Local TransportationLocal Transportation

• Hidden Costs ?Hidden Costs ?

After arrival what ??After arrival what ??

Clearance

Transhipment Bill of Entry Bond

•Questions??