What are FOB and DDP? What is the meaning when I deal with a freight forwarder?
FOB and DDP are Incoterms terms. Incoterms are not actually transportations, but trade terms that are widely used in International Trade practice to indicate responsibility and ownership of goods when it is transferring from seller to buyer. This topic is not intended to be a concise definition of Incoterms abbreviations, but rather to provide the meaning as they may apply when you are dealing with a freight forwarder. We will go around just two terms: FOB – Free on Board (1), and DDP – Delivered Duty Paid (2), which are most commonly used by freight forwarders. We use an example for importing goods to the USA by LCL. However the procedures are common regardless of type of service in the seafreight. 1. FOB — Free On Board means that freight forwarder’s responsibilities are limited by setting up a shipment at the origin and issuing to the importer carrier’s Bill of Lading. I.e. for shipments on FOB, after goods are submitted to the carrier, loaded on board of vessel and carrier’s B/L i
