FOB - Free On Board


Free On Board is the transportation term related to the shipping of goods. Normally the term FOB along with some point represents the sellers responsibility to the mentioned point, henceforth all freight, carriage and insurance costs to be borne by the buyer. In other words we can say "The invoice price includes delivery at the seller's expense to a specified point and no further".

For Example:
The term FOB is used by a seller "FOB Mumbai" means that the seller will pay all the expenses upto the port of Mumbai (which includes cost of loading, Customs clearance, origin documentation charges, and other charges). Now, it will be the responsibility of the buyer to pay all the charges beyond this point.

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