FOB Terms

FOB (Free On Board) means delivery on board the vessel at the port of shipment, a commonly used trade term in international trade. Under FOB terms, the seller is responsible for delivering the goods to the designated port of shipment and loading them onto the vessel nominated by the buyer; risk transfers to the buyer once the goods are on board. The seller bears all costs and risks before loading, including export customs clearance; the buyer is responsible for chartering and booking space, paying freight and insurance, and bears the risk after loading. FOB applies to sea and inland waterway transport. Compared with CIF, under FOB the buyer arranges transport and insurance itself, and the seller does not bear freight and insurance costs; compared with EXW, under FOB the seller is responsible for export customs clearance and loading. When using FOB, the seller should promptly notify the buyer of shipment information, and the buyer must arrange the vessel on time, otherwise additional costs may arise. In addition, the port of shipment and vessel name should be clearly specified to avoid disputes caused by delays of the nominated vessel. In customer management, clarifying FOB terms helps allocate responsibilities, control costs, and improve customer satisfaction.