FOB

The term FOB (Free On Board) is an international sales condition used in maritime trade. It means that the seller is responsible for delivering the goods on board the ship designated by the buyer, at the agreed port of shipment. Once the goods are loaded, all risks and costs are transferred to the buyer.

Seller's Responsibilities

• Transport to the port: The seller must arrange and pay for the transportation of the goods to the port of shipment.
• Customs formalities: They are also responsible for export customs formalities.
• Loading on board: The seller must ensure that the goods are properly loaded on board the ship.

Buyer's Responsibilities

• Maritime transport: The buyer chooses the ship and pays for maritime transport from the port of shipment.
• Risks and insurance: Once the goods are on board, the buyer assumes all risks and should consider taking out insurance.
• Import formalities: The buyer handles import customs formalities and transportation to the final destination.

Practical Tips

• Clear communication: Ensure that the FOB terms are well understood by both parties to avoid misunderstandings.
• Choice of port: Select a port of shipment that optimizes costs and delivery times.
• Insurance: Although not mandatory for the seller, it is advisable to take out insurance until the goods are loaded on board.

In summary, FOB is an incoterm that clarifies the responsibilities between seller and buyer, thus facilitating international trade. For more information on incoterms, check out our complete glossary.