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How does payment work in an FOB destination port situation from a Chinese import perspective?

August 29th, 2011 Leave a comment Go to comments

Payment terms for an FOB product in China can be from 20%-50% initial deposit/down payment to begin manufacturing/assembly of the product. Once completed and ready for delivery the supplier will load the product into the container (FCL and LCL) and export it to be loaded onto the container ship at the port.

The product will then be shipped to the destination port. At this point the B/L (Bill of Lading) is exchanged for the remainder of the order value. Once this has been exchanged, the product is in the custody of the purchaser or the shipping agent/freight forwarder that has been enacted.

Depending on the agreement the buyer has with the shipping agent/freight forwarder the product can be managed all the way to the buyer’s door from when the shipping agent takes custody.




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