Free on Board

**Free on Board**

The term **Free on Board (FOB)** is a common shipping term used in international trade and logistics. It indicates the point at which the responsibility and ownership of goods transfer from the seller to the buyer during shipment. Specifically, FOB defines who pays for transportation costs and at what point the risk shifts from seller to buyer.

When an agreement is made “Free on Board [named port of shipment],” the seller is responsible for delivering the goods onto the shipping vessel at the specified port. Once the goods are on board, the buyer assumes all costs and risks from that point forward, including ocean freight, insurance, unloading, and delivery to the final destination.

Understanding FOB terms is crucial for businesses dealing with import and export, ensuring clarity in contracts and preventing disputes over shipping costs and liabilities.