Even those in the shipping industry with knowledge of freight shipping terminology often are confused as to the true meaning. Free on Board or FOB is an international commercial shipment term used to indicate whether the seller of the buyer is liable for goods that get damaged or destroyed during transit. Preliminarily, it should be noted that for international sales, the parties typically use a term of sale based upon the Incoterms promulgated by the International Chambers of Commerce. First, let’s define what FOB (free on board) means by breaking down it down word-by-word. This is the most basic shipping intercom term that a supplier can provide. If a seller of goods quotes a price that is FOB destination, the sale takes place when they are unloaded at the buyer's destination. The International Chamber of Commerce, (ICC) is the organization responsible for defining FOB and many other terms related to international trade. FOB Shipping Point vs FOB Destination. A Definition and Explanation of Free On Board (FOB) Free On Board (FOB) is a trade term indicating the point at which a buyer or seller becomes liable for … Most of our projects are FOB and we contract with a freight forwarder to complete the rest of the shipping. Off Board: A stock transaction that fits one of the following two criteria: 1. For domestic sales, this will almost always include a F.O.B. FOB Origin, Freight Collect: The buyer pays for freight and shipping costs and assumes full responsibility for the cargo. This means that the seller owns the goods while they are on the truck and the seller is responsible for the shipping costs. FOB origin or FOB shipping point refers to the term that the buyer is at risk and can claim ownership of … EXW- Ex Works. A stock trade involving a security that does not trade on a major exchange, i.e., an over-the-counter (OTC) stock. FOB stands for “free on board” or “freight on board.” The shipping terms that follow “FOB” dictate who pays for shipping and when the ownership of goods is transferred. (Free on Board) term of sale derived from the Uniform Commercial Code (UCC). The FOB to gauge the shipping prices and because the Port is a good place for our freight forwarder to pick up an item. Essentially, the sale is finalized as soon as the product is taken by the shipping carrier, before being transported to the buyer. The FOB, or free on board shipping point refers to the sale of goods that takes place when the seller or provider of those goods ships out a product. The term ‘free’ refers to the supplier’s obligation to deliver goods to a specific location, later to be transferred to a carrier. A Definition and Explanation of Free On Board (FOB) Free On Board (FOB) is a trade term indicating the point at which a buyer or seller becomes liable for … Example of FOB Shipping Point. FOB Origin, Freight Prepaid, & Charged Back: The seller does not pay the cost of shipping, but instead adds the freight costs to the invoice sent to the buyer. FOB DEFINITION | SHIPPING TERMS OF SALE FOB, Free On Board, is a transportation term that indicates that the price for goods includes delivery at the Seller’s expense to a specified point and no further. What Does FOB Shipping Mean? When dealing with suppliers from China, you’ll often be offered 3 types of pricing: FOB – Free on Board (or Freight on Board). These terms are found within the Incoterms, which is an abbreviation for international commercial terms. Refers to the true meaning is finalized as soon as the product is taken by shipping. Exchange, i.e., an over-the-counter ( OTC ) stock by breaking down it down word-by-word is organization! The truck and the seller owns the goods while they are on the truck and seller... 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