Understand, Capture and Control Freight Costs
 

Domestic Terms of Sale Over the years, true understanding of domestic purchasing terms of sale and their implications have become blurred.  Issues generally do not arise until there is a problem and then the parties to the transaction attempt to sort out their individual responsibilities.  Taking time to understand the terms, will help you select the correct one for your transaction. Since transportation costs are the second or third highest expense that a manufacturing company has beyond the cost of labor and raw materials, it makes sense to know how they are allocated.  Even if you permit your vendor to pay the freight charges, you need to know the amount they paid.  Be sure to identify freight costs separate from cost of goods. Negotiating the most appropriate terms of sale will allow you to add value to your purchase.  Choosing Westgate as your transportation service provider gives you the opportunity to select the best price / service value.

F.O.B. Origin-----------------------> Freight Collect	Buyer pays freight charges Buyer bears freight charges Buyer owns goods in transit Buyer files claims - if any
F.O.B. Origin-----------------------> Freight Prepaid	Seller pays freight charges Seller bears freight charges Buyer owns goods in transit Buyer files claims - if any
F.O.B. Origin-----------------------> Freight Prepaid and charged back	Seller pays freight charges Buyer bears freight charges Buyer owns goods in transit Buyer files claims -  if any
F.O.B. Destination---------------> Freight Collect	Buyer pays freight charges Buyer bears freight charges Seller owns goods in transit Seller files claims - if any
F.O.B. Destination---------------> Freight Prepaid	Seller pays freight charges Seller bears freight charges Seller owns goods in transit Seller files claims - if any
F.O.B. Destination---------------> Freight Collect and Allowed	Buyer pays freight charges Seller bears freight charges Seller owns goods in transit Seller files claims - if any