FOB INCOTERM (Free on Board)

Using FOB incoterm

In ocean freight FOB or “Free on Board” is a shipping exclusive Incoterm and states that the seller must load the goods onto a ship chosen by the buyer. Here the seller is responsible for the cost and risk up until the point when the goods have passed the ship’s rail.

FOB is similar to the FCA ; the only difference being the risk transfer point upon crossing the ship’s rails is not specifically mentioned in FCA.

Seller’s obligations under FOB

  • Delivery of goods and documents required
  • Packaging and wrapping
  • Inland transportation in the country of origin
  • Customs at origin
  • Exit charge

Buyer’s obligations under FOB

  • Cost of the goods
  • International freight
  • Insurance
  • Arrival expenditures
  • Customs upon arrival
  • Inland transportation in the destination country
  • Payment of fees

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