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"Free on Truck" (FOT) is a crucial term in the logistics and freight forwarding industry, particularly in the context of transportation and shipping agreements. It delineates the responsibilities of the seller and the buyer in the transportation of goods by truck. Here is an overview of FOT based on the available information:
Free on Truck refers to a transportation term used when goods are transported by truck. Under FOT terms, the seller is responsible for loading the goods onto the truck at a specified loading point. Once the goods are loaded onto the truck, the responsibility for transportation costs and risks transfers to the buyer.
FOT is an important term in logistics because it clearly defines the point at which the risk of loss or damage to the goods is transferred from the seller to the buyer. This is crucial for managing liabilities and insurance requirements during the transportation process. FOT terms are specifically used when goods are carried by truck, making it a term relevant to road transportation in logistics and supply chain management .
In freight forwarding, understanding terms like FOT is essential for coordinating the movement of goods, especially in multimodal transportation scenarios where different stages of the journey might require different Incoterms. FOT is significant when organizing the initial leg of the journey, which often involves road transportation from the seller's premises to a port, airport, or another transportation hub.
While FOT provides clarity on the responsibilities of the parties involved, it also requires careful consideration of the associated risks and costs. For example, the seller must ensure that the goods are properly loaded and secured on the truck, while the buyer must be ready to take on the transportation risks and costs from that point onwards. This requires coordination and clear communication between the seller, the buyer, and the transportation providers.
Free on Truck (FOT) is a fundamental term in the logistics and freight forwarding industry, playing a significant role in the transportation of goods by truck. It provides clarity on the division of responsibilities between the seller and the buyer, thereby facilitating smooth and efficient transportation. Understanding and correctly applying FOT terms is essential for logistics professionals to ensure proper risk management and cost allocation in the transportation of goods.
