Free on Truck (FOT) Definition
FOT (Free on Truck) is a trade term that means the buyer is responsible for arranging and paying for the land transportation of the coffee from a specific warehouse to the destination. The risk of the coffee passes to the buyer when it is loaded onto a truck. FOT can be used both at the origin, where the buyer must make arrangements for loading the coffee onto the truck and paying for any loading and transport charges, or domestically. Importers usually sell FOT to roasters, which means their cost covers the costs for loading the truck and palletization, unlike EXW (Ex Works) where these charges are not included. Understanding the concept of FOT and its role in coffee logistics and trade is important for coffee industry professionals, buyers and logistics professionals.
Explained in simple terms so everyone can understand
FOT stands for Free On Truck, it means that the person who buys the coffee has to pay for the truck to take it from the warehouse to the place where it will be sold. They also have to make sure everything is arranged for the truck to take the coffee. Once the coffee is on the truck, it belongs to the person who bought it. Some people might buy the coffee this way because it's cheaper for them but it means they have to do more work to get the coffee to where it needs to be.
The most important points of Free on Truck
- FOT stands for Free On Truck, it means that the buyer is responsible for arranging and paying for land transportation of the coffee from a specific warehouse to the destination.
- The risk of the coffee passes to the buyer when it is loaded onto a truck.
- FOT can be used both at the origin, where the buyer must make arrangements for loading the coffee onto the truck and paying for any loading and transport charges, or domestically.
- Importers usually sell FOT to roasters, which means their cost covers the costs for loading the truck and palletization, unlike EXW (Ex Works) where these charges are not included.
- Understanding the concept of FOT and its role in coffee logistics and trade is important for coffee industry professionals, buyers and logistics professionals.