Jorge Rosés
Exporting avocados: paying for freight does not mean assuming the risk
Chili
In the international avocado trade, there is a fairly common misconception: that whoever pays for maritime transport is also responsible for what happens to the fruit during the journey.
But that's not necessarily the case.
When an exporter sells under FOB terms, the buyer arranges and pays for ocean freight. Conversely, when selling CIF terms, the exporter arranges and pays for freight and insurance to the port of destination.
However, there is something that many overlook: in both FOB and CIF, the risk of the goods is transferred to the buyer when they are on board the ship at the port of origin.
Let's look at a practical example:
A Chilean exporter sells a container of avocados under CIF Rotterdam terms.
During the voyage, a failure occurs in the container's refrigeration and the fruit arrives in poor condition.
Who is responsible?
Even if the exporter has arranged and paid for the maritime freight, the risk during the journey corresponds, in principle, to the buyer, who may resort to the insurance arranged or claim against the carrier, as appropriate.
But be aware: this does not mean the exporter is released from all responsibility. If the fruit was shipped with quality problems, incorrect temperature, or inadequate packaging, they could still be liable.
For an avocado exporter, it is essential to distinguish three concepts:
- Who pays for the transport?
- Who controls and contracts the logistics service?
- Who assumes the risk of the fruit during the journey?
They are not always the same part.
Jorge Rosés W.
International Sales Manager
Seemann Trader
jroses@seemanngroup.com
