What does FOB mean here?
FOB (free on board) names where the buyer takes over. The main US OCC index is assessed FOB seller's dock: it is the price for baled, full-truckload material as it sits at the seller's dock, before the haul to the mill. Your own contract is often one step earlier in the chain, so the buyer's spread or percentage normally pays for moving and handling your material. Ask whether it does, before agreeing to a separate freight charge as well.
How is freight usually charged?
- Built into the spread. No separate line; the spread is wider.
- Per load. A fixed charge per pickup. This hurts light loads most: the same charge spread over fewer tons.
- Per ton. A rate per ton moved. Easier to compare with the spread, but check what ton it uses.
- Fuel surcharge. A variable add-on, ideally tied to a public diesel series rather than a buyer's own table.
How do pickup terms affect the money?
Pickup frequency, trailer swaps and lead times decide how full each load is. A buyer that collects whenever a trailer is called for lets you ship full loads; one that collects on a fixed day can leave you shipping half loads, with the same freight charge. Connect this clause to load minimums.
Sample wording
5.1 Transport. Buyer shall provide trailers and transport at its cost; no freight shall be deducted from the price under section 3. [Or: Buyer may deduct $[___] per load.]
5.2 Pickup. Buyer shall collect a loaded trailer within [2] business days of Seller’s request and shall keep [1] empty trailer on site at all times.
What to negotiate
- Ask whether the spread already covers freight; if it does, refuse a second freight line.
- Prefer freight per ton to freight per load if your loads vary in weight.
- Tie any fuel surcharge to a public diesel series and a stated base price.
- Put pickup response times in the contract, with a credit if they are missed.
Red flags in a draft
A freight charge per load and a wide spread, with no explanation of what each covers.A fuel surcharge from the buyer’s own table.Pickup "as scheduled by Buyer".
Questions
- Should a cardboard buyer charge for freight?
- It depends on the formula. If the spread or percentage is meant to cover moving the material, a separate freight charge counts the cost twice. Ask for it in writing.