FOB (Free on Board) is a shipping term used in international trade that defines when the responsibility and risk of goods transfer from the seller to the buyer.
Key Features:
Seller's Responsibility:
Deliver goods to the designated port and load them onto the ship.
Cover all costs and risks up to the loading point.
Buyer's Responsibility:
Assume costs, risks, and insurance once the goods are on board the ship.
Handle transportation, customs, and delivery from the port of departure to the final destination.
Example:
A seller in India ships textiles to the USA under FOB terms. The seller covers costs until the goods are loaded onto the ship in Mumbai. After that, the buyer is responsible for the transport, insurance, and risks.