Reducing The Risk to FOB

In general, in international trade transactions agreements between importers and exporters will refer to a certain value. Incoterms 2010 are instruments intended to facilitate international trade transactions. Incoterms are prepared with a view to uniform interpretation of the terms of trade which establishes the rights and obligations of the seller and the buyer, especially in the mechanism of delivery of the goods. In detail, there are 11 incoterms ToD is set in 2010, and some of them are FOB, Cost and Freight (CFR) and CIF. FOB Incoterms 2010 terminology implies that risk turning point on the delivery of goods occurs when the goods being transacted been loaded (on board) on a ship ready to depart at the port of departure. The obligation to bear the costs of transporting goods are required to be covered by the exporters is up to the loading of the goods on board the ship at the port of departure. The fact of export transactions have grown more dominant in terms of FOB. In other words, buying goods from abroad with the FOB system can provide a distinct advantage for importers, given the constraints when dealing with customs In Indonesia, which not infrequently lead to disputes.

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