FOB Free On Board is an Incoterm where the seller is responsible for delivering goods onto a vessel, and the risk transfers to the buyer once the goods are loaded on the ship.
How It Works:
- The seller prepares and transports goods to the port.
- Goods are loaded onto the vessel.
- Risk transfers to the buyer at the point of loading.
- The buyer arranges shipping and insurance.
- The buyer handles import procedures and delivery.
Benefits:
- Clear transfer of risk at the port
- Suitable for sea freight transactions
- Gives buyer control over shipping
- Widely used in international trade
Example:
An exporter loads goods onto a ship at an Indian port, after which the buyer takes responsibility for the shipment.