分享 facebook
分享 twitter
分享 linkedin

What FOB Means

What does FOB Mean in Shipping Terms?
Free on Board, or FOB is an Incoterm, which means the seller is responsible for loading the purchased cargo onto the ship, and all costs associated. The point the goods are safe aboard the vessel, the risk transfers to the buyer, who assumes the responsibility of the remainder of the transport.  
FOB is the most common agreement between an international buyer and seller when shipping cargo via sea. This Incoterm only applies to sea and inland waterway shipments.
What are the Seller’s Responsibilities?
When entering into a sales contract with the Incoterms of FOB, the seller assumes the following responsibilities: 
Export Packaging: Arranging all export packaging so the cargo can be shipped safely.
Loading Charges: Any expenses incurred during the loading process at the seller’s warehouse.
Delivery to Port: Trucking fees incurred while moving the cargo from the warehouse to the port of loading.
Export Duty, Taxes & Customs Clearance: Ensuring the cargo is exported correctly.
Origin Terminal Handling Charges: The seller is responsible for OTHC.
Loading on Carriage: The seller is responsible for the costs incurred to load the cargo onto the carriage. 
What are the Buyers Responsibilities?
When a buyer agrees to purchase goods under the Incoterms of FOB, they consent to the following responsibilities and risks: 
Freight Charges: Carriage charges to ship the cargo from the port of loading to destination. 
Insurance: Under FOB, freight insurance is not a requirement; however, it is the buyer’s decision if they would like to purchase an insurance policy for their shipment.

Sellers appreciate FOB Incoterms as well because once the cargo leaves their factory, they can consider the sale complete.

Disadvantages of Shipping FOB for the Buyer
There are little to no disadvantages to FOB for most buyers. For newer importers or importers who have always purchased under Incoterms where the seller organizes the freight costs, the process can seem more complicated, because there is an added step. However, the significant cost savings and control quickly outweigh this disadvantage.

发表评论

您的电子邮箱地址不会被公开。

4 + 12 =

If you require any further information, feel free to contact me

small_c_popup01

Let's have a chat