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Glossary
Consignee
Glossary
FIOT (Free In and Out and Trimmed)
Definition
FIOT (Free In and Out and Trimmed) is an essential shipping term every shipper and consignee should understand. It outlines a specific freight arrangement where the shipper bears the expenses related to the loading and unloading of the cargo. Additionally, the shipper is responsible for the costs of trimming the cargo. Trimming involves leveling and stabilizing the cargo within the vessel’s hold to ensure safe and balanced transit.
Under the FIOT model, while the shipper handles the initial handling and preparation of the cargo, the consignee is accountable for the transportation costs from the port of origin to the port of destination. This division of responsibilities helps streamline the process, potentially reducing costs and improving efficiency for both parties involved in the shipping transaction.
— sennder Team
FAQ
Under FIOT, the shipper is responsible for the costs of loading, discharging, and trimming the cargo, ensuring it is level and balanced in the vessel's hold. The consignee is responsible for the costs of transporting the cargo from the port of origin to the port of destination.
FIOT differs from other shipping terms in the allocation of responsibilities and costs between the shipper and consignee. Unlike FIOS (Free In and Out Stowed), FIOT requires the shipper to cover the costs of trimming the cargo in addition to loading and discharging costs. Other shipping terms, such as FOB (Free on Board) and CIF (Cost, Insurance, and Freight), assign different responsibilities and cost allocations between the parties involved.
FIOT offers several benefits, including:
Flexibility: FIOT allows the shipper and consignee to share responsibilities and costs, resulting in more flexible shipping arrangements.
Cost-effectiveness: By sharing costs, both parties can potentially achieve cost savings compared to other shipping terms that place the entire financial burden on one party.
Customization: FIOT arrangements can be tailored to meet the specific needs and preferences of both the shipper and consignee, allowing for a more customized approach to shipping logistics.
FIOT is typically used in shipping arrangements where both parties are willing to share responsibilities and costs, and where cargo trimming is a necessary part of the process. This can be particularly beneficial in situations where the shipper and consignee have established relationships and trust, allowing them to negotiate and collaborate on the most effective and efficient shipping logistics.
Example or usage in road freight logistics:
A manufacturing company in Germany agrees to ship automotive parts to an assembly plant in the United Kingdom using FIOT terms. Under this arrangement, the German manufacturing company is responsible for the costs of loading the parts onto the truck, securing them for transport, and ensuring they are properly documented for customs clearance. The UK assembly plant covers the costs of transporting the parts from the German border to their facility, including tolls, fuel, and driver expenses. By sharing responsibilities and costs, both parties can achieve a more flexible and cost-effective shipping arrangement, reducing their overall logistics expenses and improving their supply chain efficiency.