Freeboard
Freeboard
What does this term stand for?
Free on Board (FOB) is an international trade term under Incoterms where the seller fulfills their delivery obligation when the goods are loaded onto the vessel at the agreed port of shipment. From that point, the buyer assumes all costs and risks, including ocean freight, insurance, unloading, and onward transportation. FOB is widely used in maritime logistics to clearly delineate responsibilities between the seller and buyer, ensuring transparency in shipping, cost allocation, and risk management. Proper execution of FOB requires careful coordination with shipping lines, adherence to port schedules, and accurate documentation for customs and insurance purposes. FOB provides a clear framework for international trade, minimizing disputes and supporting smooth movement of goods across borders.
Key Characteristics:
- Seller Loading
- Buyer Liability
- Port Delivery
- Risk Transfer
- Cost Allocation
- Shipping Coordinated
- Documentation Accurate
- Customs Cleared
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