1. What does FOB mean in shipping?
FOB (Free on Board) is an Incoterm used in international trade. It means the seller is responsible for delivering goods to the port and loading them onto the ship. Once loaded, the risk and cost transfer to the buyer.
2. What are the seller's responsibilities under FOB?
Under FOB terms, the seller must:
✅ Package and label the goods
✅ Handle export customs clearance
✅ Transport goods to the port of shipment
✅ Load goods onto the vessel
✅ Provide documents (Bill of Lading, Packing List, etc.)
3. What costs does the buyer cover under FOB?
The buyer is responsible for:
💸 Ocean freight and insurance
💸 Unloading at the destination port
💸 Import duties, customs clearance, and inland delivery
4. What are the advantages of FOB for buyers?
More control over freight forwarder selection
Better negotiation on shipping rates
Easier shipment consolidation
Transparency in logistics and pricing
5. FOB vs. CIF: Which is better?
FOB is better if:
You want control over logistics
You work with your own forwarder
You want transparent pricing
CIF is better if:
You want the seller to handle shipping
You're new to international trade
🧠 Note: CIF often hides higher shipping and insurance costs.
6. Can I use my own freight forwarder with FOB?
Absolutely!
That's a major advantage of FOB - the buyer chooses the forwarder, giving you control over cost, speed, and service level.
7. What documents are typically required for FOB shipments?
🧾 Commercial Invoice
📦 Packing List
📄 Bill of Lading (after loading)
🌍 Certificate of Origin (if needed)
🚪 Export Declaration (by seller)
8. What are the risks of FOB for buyers?
🚢 Damage or loss after loading is the buyer's risk
🕒 Delays if seller doesn't load on time
📞 Coordination issues with forwarders can impact delivery
💡 Tip: Consider cargo insurance for high-value shipments.
9. Can FOB be used for air freight?
Not officially.
FOB is meant for sea or inland waterway transport.
For air shipments, use FCA (Free Carrier) instead - it's the correct Incoterm.
10. Which port should be named in an FOB agreement?
Always specify the port of shipment, e.g., FOB Shenzhen or FOB Ningbo.
This clarifies where seller's responsibility ends and avoids disputes.
