Transportation Terms
Transportation terms define when title (ownership) of the goods pass from Thorvie International LLC to CUSTOMER and which party will pay for the shipping costs. The question of ownership is very important if the goods are damaged while in transit. Terms between the Thorvie International LLC and CUSTOMER are set in the final communication between the two parties – typically the order invoice. All Thorvie International orders are shipped “FOB Destination Freight Prepaid and Added (or Charged Back)”
Example Transportation Terms:
FOB Destination (Who is responsible), Freight Collect (Who pays transportation costs)
Complete transportation terms answer two questions:
- who owns the goods when?
and- who is going to pay for the costs of shipping the goods?
1. Who owns the goods when?
The first question of who is owns the goods and is responsible for them (who holds title) is answered by the first word after the acronym FOB. In our example:
| Terminology | Who is responsible/owns the goods in transit? |
| FOB Destination | Thorvie International LLC owns the goods in transit and is responsible for the condition of the goods in transit, insurance and filing claims with the carrier. Title passes to CUSTOMER only when the goods reach the requestor. |
| FOB Shipping Point or FOB Origin | CUSTOMER owns the goods in transit and is responsible for the condition of the goods in transit, insurance, and filing claims with the carrier. Title passes to CUSTOMER when the goods are presented to the carrier on Thorvie International LLC’s dock. |
2. Who is going to pay for the costs of shipping the goods?
The second question of who is responsible for final payment of the transportation costs is answered by the second part of the transportation terms. In our example:
FOB Destination, Freight Collect (Who pays for transportation costs?)
| The Second Terms: Transportation Payment Terms | Who bears the final costs for shipping? |
| FOB (x), Freight Collect | CUSTOMER pays the transportation expenses and does not charge back to the Thorvie International LLC |
| FOB (x), Freight Collect and Allowed | CUSTOMER pays the transportation expenses at first but charges back the transportation expenses to the Thorvie International LLC |
| FOB (x), Freight Prepaid and Allowed | Thorvie International LLC pays the transportation expenses and does not charge back to CUSTOMER |
| FOB (x), Freight Prepaid and Added (or Charged Back) | Thorvie International LLC pays the transportation expenses but charges back the transportation expenses to CUSTOMER on the Order Invoice. |
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