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Shipping Terms and Return Insurance

Shipping Terms

F.O. B. DESTINATION

The Shipping Term FOB Destination (Free or Freight on Board) indicates the vendor retains title and control of goods until delivery. The vendor bears the risk of the transportation and if loss or damage occurs files claim with the carrier for recovery and ships us a replacement. If the shipment was FOB Origin title passes to us at shipment and we are responsible for claim and replacement. The New York State Office of the State Comptroller has indicated Purchase Orders should show ‘FOB Destination.’

PREPAID AND ADD or PREPAID AND ADDED BACK

This term refers to shipping or freight charges.

Freight charges are prepaid by the vendor and then added to invoice as a separate line item.We pay the freight charge along with the other invoice charges.

Freight charges on shipments to our campus should be reflected on the Purchase Order as either‘Prepaid’ or ‘Prepaid and Add.’

Insuring Returned Goods

Occasionally goods are defective and must be returned to shipper for repair or replacement. Returned goods should be insured for the value of the goods. Failure to do this will result in minimal recovery should goods be lost or damaged in transit

Currently UPS provides domestic courier service under New York State Contract (http://www.ogs.state.ny.us/purchase/snt/awardnotes/7901120029can.pdf), and it has a standard $100 insurance payment maximum for lost or damaged shipments. If the item value is greater than $100, it can be insured for nominal by entering the amount in the Declared Value box on the shipping document (see UPS Accessorial and Surcharges page 28 at http://www.ogs.state.ny.us/purchase/prices/7901120029prices.pdf)).

If the insured goods suffer loss and damage, claim must be filed with UPS within 9 months after delivery of the package or in the case of non-delivery within 9 months after a reasonable time for delivery has elapsed. For more on UPS declared value: http://www.ups.com/content/us/en/resources/service/claims/hlp/lost_process.html)

For more on UPS claims (http://www.ups.com/content/us/en/resources/service/claims/hlp/lost_process.html).

Insurance and claim procedures may differ with other common carriers (i.e., local and interstate trucking companies).

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Last Updated: 8/24/09