what is fob in export

FOB, or Free on Board, is a shipping term that defines the point at which the buyer takes ownership and responsibility for goods being transported. There are two main variations of FOB: FOB Origin and FOB Destination. FOB Origin means that the buyer assumes ownership and risk of the goods at the shipment point, while FOB Destination means that the seller retains ownership and responsibility during transit until the items reach the buyer. The FOB price includes delivery to the destination port, cost of material, and all other export requirements from the sellers side. FOB terms are important in purchase contracts as they indicate who selects the carrier, which party bears the freight charges, and who has the title to the goods. FOB is commonly used for all types of shipping, both domestic and international, and is particularly popular for bulk cargo shipped by sea. It allows the buyer to select their freight forwarder for the entire shipment, giving them control over logistics and shipping costs. Sellers appreciate FOB terms as well because once the cargo leaves their factory, they can consider the sale complete.