Research On Bill Of Lading Risks Under FOB Terms

In international trade, trade terms FOB is most frequently used especially in export trade, because the domestic exporter believe they will afford less cost and take limited risks.In fact, when the terms FOB is used in the contract, the exporter will be faced with various risks ranging from transportation, insurance, document and settlement.The Bill of Lading plays a very important part in ocean transportation, trade settlement and contract execution. As the B/L is negotiable, transferable and easy to counterfeit, a range of issues arise during its usage and therefore, B/L risks have become the main risks for domestic exporters.In this paper, we will firstly learn about the characteristics of trade terms FOB and the risks of the seller under the terms. And then we will make study on the nature and function of B/L, the comparison between three international Convention relating to B/L, e.g. "Hague Rules", "The Hague -Visby Rules" and the "Hamburg Rules", and the new changes about B/L in "UCP600". On the basis of the study, we would like to deeply analyze the B/L risks, including their forms and causes. Finally we will put forward all kinds of effective countermeasures for sellers to avoid the risks, and hope to guide China's export enterprises to do business.According to the structure and content arrangements, the paper can be divided into four parts:The first part is to analyze the features of FOB contract and all the risks for exporters under FOB, including insurance, cargo convergence, freight, B/L and settlement and so on. From the comparison with CIF, it is recommended to make use of CIF or CFR terms in export trade.The second part is to make in-depth study on B/L system, from the definition and function, comparative analysis of three International Convention as well as the new changes relating to B/L in "UCP600". The influence of international conventions and international practices on the sellers and carriers will be analyzed.The third part is the Emphasis of the paper. Firstly, we make comprehensive and systematic research on the risks under FOB terms. And then we summarize the causes for B/L risks from four aspects, including Documentary L/C system, B/L legal application, practices in shipping as well as characteristics of B/L itself.Based on the analysis of previous parts, the fourth part is to put forward some practical suggestions and recommendations for domestic exporters. We hope they could learn from this paper, and reduce risks in exporting trade.