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Advantages import shipment on FOB Basis



Shipment of import or export easy if you appointed International freight forwarding company  but it’s depend on your shipment terms which decided at the time of finalizing the product. It will always good,decide the shipment terms as FOB or Ex-works . Following are major advantages of import the shipment as FOB/Ex-works . 

1. Freedom of appoint shipping agent

Importer have choice to appoint their shipping agent because freight is on collect basis. In case of FOB or EX-works importer must have to appoint their shipping agent, doing so will benefit in not increasing  total landed cost of product .

2. Communication & report of readiness


It will be an advantages to the importer that the some time exporter does not give the correct ready information of the shipment. If receiver have appointed a shipping agent they can easily get the correct ready date because they have local network speak in mother tongue and give the  right call. 

3 Easy tracking


Shipment will be easier to track after dispatch because now you have appointed your shipping agency.They have many means to gather the right information because they provide their services to many importers & exporters.There is no chance that you do not get the right information. 

4 freight credit

You can make a credit agreement with the shipping agency.This can be done after signing some documents.It become easier after KYC ( Know your customer) & providing the signing cheque.
This is also a advantage you can take credit of freight amount and that fund can be used for some time in other head. 

5 custom duty on 20% freight

When a material come to India,it is subject to custom first & the custom department imposes custom duty on it . In the calculation of custom duty freight & Ex-works also added, which is used to calculate 20% of Invoice value or at actual, whichever is less. If we have already prepaid the freight then exporter add the entire freight to the invoice and must pay the custom duty at destination on the full freight . In ocean shipment custom duty levied on ocean freight only  (Formula is same as above) but freight is usually prepaid to the dry port including inland haulage. Due to ignorance,importer also pay custom duty on inland haulage, which  can saved according to the rule. 

6 Avoid Heavy Destination charges.

You can also determine destination charges from your shipping agent. If freight is prepaid then you are at risk of arbitrary destination charges. Some exporter pay a little freight  & suggest to charge the remaining freight in another head at destination & this is likely to happen with one time importer.  

7. Door to Door

Talk to your shipping agent for the door to door delivery, this will save time .Your agent will be responsible for deliver your shipment to your factory only you have to submit relevant documents .
Related documents & custom duty are mandatory.
More information & booking of shipments contact us  jp@signetfrt.com

Signet Freight express Pvt Ltd -India
bhushan@signetfrt.com
+ 91 11 46062660/46062294

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