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What is FOB?
What Is Fob

FOB - Free on Board - is an Incoterms term. Incoterms are not actually transportations, but trade terms that are widely used in the International Trade practice (particularly in the Sea Freight industry) to indicate responsibility and ownership of goods when it is transmitting from seller to buyer.

Note: By this topic we do not intend to provide a definition of the Incoterms abbreviation - (FOB), but rather to provide the meaning as that may apply when you are dealing with US Freight Forwarder (an International Transportation Company) on ocean freight shipments.

FOB -- Free On Board, in respect of sea freight, means that freight forwarder's responsibilities are limited by setting up a shipment at the origin and, upon its sailing to the destination to issue to the shipper a Bill of Lading (the title on shipped goods).

I.e. for shipments on FOB, after goods had been submitted to the direct ocean freight carrier at the origin, loaded on board of vessel, sailed from the origin and entered in the destination county's Commerce zone (i.e. reached the destination) all cargo recovery formalities are the consignee's responsibilities. All destination charges related to the recovery of goods at the destination are on account of the consignee.

IMPORTANT!: Our Online Sea freight Shipping System reflects sea freight service based on FOB.

FYI: You may also find useful these main terms for conventional sea freight:

  • BASIC FREIGHT - It is the cost of the sea freight from port to port.
  • LINER TERMS - Or freight rate; conditions under which shipping companies transport goods. The freight is inclusive of carriage and cost of cargo handling at the loading and discharging ports.
  • F.I.O.S. - Free In Out and Stowed; the freight rate excludes the costs of carriage and of cargo handling at the loading and discharging ports.
  • F.I.L.O. - Free In, Liner Out; the freight is inclusive of the cost of cargo discharging. It does not include the cost of loading.
  • L.I.F.O. - Liner In, Free Out; the freight is inclusive of the cost of cargo loading. It does not includes the cost of discharging.
  • F.I.S.L.O. - Free In and Stowed, Liner Out; the freight is inclusive of the cost of cargo discharging. It does not include the cost of stowage and of cargo loading.
  • ALL IN - All Inclusive; the costs are all inclusive in the freight.
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