The sum of charges, taxes, and fees to transport goods from one location to another by land, sea, or air.
Freight costs are typically included in the buying, shipping, and selling of cocoa beans or products in the fine chocolate value chain.
Incoterms more specifically reflect the terms of buyer obligations, seller obligations, and transfer of risk/cost at a specific point.
For example, FOB (Free on Board) contract terms place the freight costs related to purchase of cocoa from farm, quality processing/export preparation, government documents/export requirements, and transport until placement of the cocoa at port as the responsibility of the seller. The buyer is then responsible for the sea freight, insurance, import processing/customs clearance and warehouse at destination.
Próximamente versión en español
Authored by
Kate Cavallin, General Manager, Cacao Latitudes
Supply Chain Professional
References
“Freight Expense,” CFI Team, Corporate Finance Institute, updated December 11, 2022 (accessed December 16, 2022)
“What are Incoterms® rules?,” ICCWBO (accessed December 16, 2022)
“Contract Rules for Cocoa Beans, Applicable to contracts concluded on or after 01 July 2019,” Federation of Cocoa Commerce (FCC), access a pdf of this contract
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