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Free on Board (FOB) is a shipment term indicating the point at which a buyer or seller assumes ownership and liability for goods being transported.
FOB (free on board) is a term in international commercial law specifying when the seller's and buyer's obligations, costs, and risk shift in the delivery of goods. Learn about the origin, meaning, and variations of FOB in different contexts and regions.
FOB Incoterms & More Free On Board (FOB) Of the 11 different incoterms that are currently used in international freight, Free on Board (FOB) is the one that you will encounter most frequently. This guide cuts through the legal jargon and explains everything you need to know about this common incoterm in plain English. FOB Shipping Meaning
Types of FOB Terms. FOB Origin, Freight Collect: The buyer takes ownership and liability as soon as the goods are picked up by the carrier. The buyer is also responsible for paying the freight charges. FOB Origin, Freight Prepaid: The buyer takes ownership and liability at the point of origin, but the seller pays the freight charges. FOB Destination, Freight Collect: The seller retains ...
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Free on Board (FOB) Definition. Free on Board, commonly referred to as F.O.B., is a shipping designation used to specify obligations and responsibilities for goods when they are shifted from seller to buyer as sea freight. FOB is part of the incoterms list published by the International Chamber of Commerce.
Also see our complete Incoterms Guide 2023. The world of international shipping can be difficult to navigate, even for those with experience. Free on Board (FOB) is one of the most commonly used Incoterms, and understanding it can help ensure your business is compliant with international trade regulations while also protecting your interests as a shipper.
However, FOB Origin, Freight Collect is the most popular FOB term. When the seller places the items on the freight carrier, the buyer instantly takes ownership and obligation. In fact, the seller can label the products as "complete" in their books and leave the remaining to the buyer. The buyer then pays for shipping, insurance, customs ...
FOB Shipping Point (or FOB Origin): The buyer takes ownership of the goods as soon as the seller ships them. From this point, the buyer is responsible for transportation costs and any risks associated with shipping. FOB Destination: The seller retains ownership and responsibility for the goods until they reach the buyer's specified location ...
What is the FOB Incoterm (Free On Board) In ocean freight, the FOB Incoterm, or "Free on Board", is an Incoterm that's exclusive to ocean freight shipping.It states that the seller must load the goods onto the ship chosen by the buyer. The seller is also responsible for all costs and risks up until all goods are loaded on board the vessel, at which point the risks are transferred to the ...