FOB (Free On Board) is an Incoterm in which the seller handles goods, origin-side transport and export clearance up to the port of origin. Once goods are loaded onto the shipping vessel, the buyer takes over - arranging international freight, insurance, import clearance and final delivery to the destination.
What FOB Means
FOB (Free On Board) is an Incoterm in which the seller is responsible for goods until they are loaded onto the shipping vessel at the port of origin, including origin-side transport and export clearance. From that point, the buyer takes over - international freight, insurance, import clearance and final delivery.
Why FOB Matters
FOB is a common middle-ground term - the buyer avoids origin-side logistics complexity while still controlling the international freight arrangement (and its cost).
When FOB Applies
FOB suits buyers who want to arrange and control their own international freight (often for better shipping rates or an existing freight relationship) without managing origin-side logistics themselves.
What Trips Up First-Time Buyers
Not confirming which port and what 'loaded' actually means
Responsibility transfers at a specific point - confirm this explicitly rather than assuming.
Not arranging freight insurance separately
FOB doesn't include insurance - the buyer needs to arrange it for the international leg.
FOB Compared
| Term | Seller responsibility ends at | Buyer takes over |
|---|---|---|
| EXW | Factory door | Everything from origin logistics onward |
| FOB | Loaded onto vessel at origin port | International freight, insurance, import, delivery |
| CIF | Destination port (freight + insurance included) | Import clearance, duty, final delivery |
| DDP (where available) | Buyer's door, duties paid | Minimal - receiving the goods |
FOB Checklist
- Confirm which port and what 'loaded' means precisely
- Arrange freight insurance separately - FOB doesn't include it
- Compare your own freight rate against a seller-arranged CIF quote
- Confirm who handles export documentation at origin
Process Flow
Common Questions
Does LYBAM coordinate FOB shipments?
Yes. Worldwide export shipping including EXW, FOB, CIF and DDP (where available), coordinated with freight forwarders for global delivery.
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