What does FOB mean?
FOB is an acronym for “Free On Board”, or “Freight On Board”, indicates a free port with the destination port name. If a seller offers a price FOB to a destination, the seller is responsible for all costs of handling and transport to the destination.
It is up to the buyer to pay the fees beyond that place. The seller organizes and pays for transport in the country of export. The risks and costs are transferred from the seller to the buyer when the goods leave the container or the aircraft.
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A FOB specifies which party (buyer or seller) pays for shipping and loading, and/or when the responsibility for the merchandise is transferred. The final distinction is important to determine the liability or risk of loss for lost or damaged products in transit from seller to buyer.
The precise meaning and use of “FOB” can vary considerably. International shipments usually use ” FOB as defined by the standards Incoterm, where he remains for” Free On Board “. Domestic shipments within the United States or Canada often use a different meaning, specific to the North America, which is incompatible with the standards Incoterm.
with the advent of e-commerce, most e-commerce transactions are conducted in procedures “FOB shipping Point”