Liner Terms in the Voyage

Introduction

In the shipping industry, liner terms are used to define the cost and responsibilities of the parties involved in a voyage. It is important to understand these terms before entering into a contract for transportation. This article will explain the most commonly used liner terms in the voyage.

Freight on Board (FOB)

FOB is a term commonly used in the shipping industry to describe the point at which the seller hands over responsibility and costs of the goods to the buyer. When a shipment is FOB, the seller is responsible for loading the goods on the ship, and the buyer is responsible for the remaining expenses and risks associated with the shipment.

Cost and Freight (CFR)

In a CFR shipment, the seller is responsible for the cost of transportation and loading of the goods on the ship. The buyer is only responsible for the offloading and any port charges associated with the shipment. The seller bears most of the risk of loss or damage to the goods during the transportation.

Cost, Insurance and Freight (CIF)

CIF is a term that means the seller is responsible for the cost of transportation, loading, and insurance of the goods on the ship. The buyer is only responsible for the offloading and any port charges associated with the shipment. The seller bears most of the risk of loss or damage to the goods during the transportation, but the buyer has the added protection of insurance coverage providing some degree of protection.

Conclusion

Understanding liner terms is critical in negotiating transportation contracts, to ensure that all parties involved share the cost, risks and responsibilities fairly. It is important to read and understand the contract terms thoroughly before signing. By doing so, all parties involved can have clear expectations and avoid misunderstandings that can lead to disputes and additional costs. In conclusion, understanding the most commonly used liner terms in the voyage can help shippers and receivers to make informed decisions regarding transportation of goods. It is always advisable to seek professional advice to ensure that the contract and terms are appropriate for the specific needs of the shipment.