The seller delivers the goods and hands it over to the buyer on board the ship. From here on, transport costs and transport organization are entirely directed by the customer through its designated freight forwarder. There is a plethora of reasons why this is better for the importer:
- All costs are known in advance under the terms and conditions as offered by the importers freight forwarder
- Under CFR/CIF terms, importer has no clear information about the destination charges, which are always much higher than the entire cost of the transportation would have cost, should the cargo be transported under FOB terms.
- The deadline for payment of transport in talks with its shippers, which can provide a postponement of the date of arrival of the consignment at the destination port of landing
- Most importantly, the importer decides on the service and quality of the transport and therefore controls the critical parts of the supply chain: cost and transit time
Through your freight forwarder, you choose the freight forwarder, who has negotiated prices, dates and ports of loading, has checked local and destination charges and fully plans and tracks your cargo from the starting to the ending point. More importantly, the importer avoids the coordination of several shippers / agents, which may be involved, if organization of transport is not in importers hands.
Choosing a good and trustworthy freight forwarder means a big advantage for you, since only the logistics expert can make sure that your cargo arrives safely and timely.
The fundamental purpose of the Institute’s general average is that if during the time of cargo transportation, the ship comes to dangerous situations in which distressed assets involved in this journey (ship, cargo freight) are at risk, and any of these assets are sacrificed for the common benefit, the owner of the cargo holds the property right for the proportionate reimbursement from all participants on the ship. This means that the general average is counted as value cargo ships as well as freight and rescue costs. In case ships must be rescued, are burning, stranding, or are broken, cargo owner must participate in them to the costs of resolving all participants of transportation, commensurate with the value of the property. If the goods are insured, such a loss such as breaking are covered by the insurance company. If the goods are not insured, the cost must be borne by the owner of the goods.
In any case, the transport insurance is also recommended for other loss events, only on the possibility of general average.
More about the Institute general average can be found in the Maritime Code of the Republic of Slovenia 12.4.2001, Articles 788 to 823 line.