GLOSSARY

Free On Board (FOB)

An international trade term where the seller is responsible for the goods until they are loaded on board a ship at the named port of shipment.

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What is Free On Board (FOB)?

Free on Board (FOB) is an Incoterm, which is an international trade term that outlines the obligations of the seller and the buyer in an international sale of goods. Under FOB, the seller's responsibility is to deliver the goods on board the vessel nominated by the buyer at the named port of shipment. The buyer is responsible for all costs and risks related to transporting the goods from the named port to their final destination.

Some key differences between FOB and FCA include:

Under FOB, the seller is responsible for the costs and risks of bringing the goods to the named port of shipment.
Under FCA, the seller is responsible for the costs and risks of bringing the goods to the named place in the country of export.

Under FOB, the buyer is responsible for all the costs and risks related to transporting the goods from the named port to their final destination.
Under FCA, the buyer is responsible for all the costs and risks related to transporting the goods from the named place to their final destination.

FOB is a good choice for buyers who want to have control over the transportation of the goods. It’s also a good choice for sellers who want to minimize their costs and risks.

The Best Incoterms® For Importers: Winning in International Trade - USA Customs Clearance

11 Types of Incoterms®: International Trade Terms Explained - USA Customs Clearance

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