International Trade Terms Glossary

FOB - Free On Board

You use this term if you have agreed to make sure the goods are loaded onto the ship at the named port.

The seller delivers once the goods pass the ship's rail at a named port of shipment. This means the buyer must bear all costs and risks of loss of or damage to the goods from that point. FOB demands the seller obtain clearance of goods for export.

In the days before transporting goods was done by `plane and shipping was the norm, FOB was the most commonly used Incoterm. Its legacy means that it is sometimes incorrectly applied to this day if water-borne transport is not used. If the goods are going by air, use FCA instead of FOB.

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