What does FOB (“free on board” or “freight on board”) actually mean?
Free on Board (FOB) means the goods are placed on board the vessel by the seller at the port of shipment specified in the sales contract. The risk of loss or damage is transferred to the buyer when the goods pass the ship’s rail. The buyer has to bear all costs and risks of loss of or damage to the goods from that point forward. The vendor is responsible for the shipment until it is loaded on board, and is required to clear the goods for export. A buyer will seldom agree to this form of shipment and assume all the costs and risks.
