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Hughes

U.S. Domestic Terms of Sale

FOB (free on board) points are specified in HUGHES® purchase orders. The U.S. domestic FOB point is either origin or destination. The FOB point specifies where the supplier is obligated to have the material packaged and ready for shipment (FOB origin) or where the supplier obligation for safe and timely transit ends (FOB Destination).

There are many variances to the FOB terms as shown within this guide. Those terms most frequently used by Hughes are described below.

FOB Origin with freight charges collect:

  • Title passes to Hughes when the freight is loaded on the carrier stipulated on the appropriate Hughes routing guide.
  • Risk of loss and the filing of claims for loss and damage are the responsibility of Hughes as long as the supplier follows the routing guide instructions.
  • Freight charges are automatically sent to Hughes.

FOB Origin with freight charges prepaid and billed

  • The freight charges are paid by the supplier and the charges are added to the suppliers invoice for the material. Appropriate copies of the carrier's freight charges are required as back up to the invoice. All other aspects of FOB origin remain the same.

FOB destination with freight charges prepaid:

  • Title passes to Hughes upon safe delivery of the material by the supplier's carrier.
  • Risk of loss and filing of claims for loss and damage are the responsibility of the supplier.
  • Freight charges are paid by the supplier.


 

EFFECTS OF TERMS OF SALE ON DISTRIBUTION:

1. FOB Origin, Freight Collect

 

Buyer pays freight charges
Buyer bears freight charges
Buyer owns goods in transit
Buyer files claims (if any)

2. FOB Origin, Freight Prepaid

 

Seller pays freight charges
Seller bears freight charges
Buyer owns goods in transit
Buyer files claims (if any)

3. FOB Origin, Freight Prepaid and Charge Back

 

Seller pays freight charges
Buyer bears freight charges
Buyer owns goods in transit
Buyer files claims (if any)

4. FOB Destination, Freight Collect

 

Buyer pays freight charges
Buyer bears freight charges
Seller owns goods in transit
Seller files claims (if any)

5. FOB Destination, Freight Prepaid

 

Seller pays freight charges
Seller bears freight charges
Seller owns goods in transit
Seller files claims (if any)

6. FOB Destination, Freight Collect and Allowed

 

Buyer pays freight charges
Seller bears freight charges
Seller owns goods in transit
Seller files claims (if any)

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