FOB (Free On Board), also known as "free alongside ship," is one of the commonly used trade terms in international trade.
In a transaction conducted based on FOB terms, the buyer is responsible for arranging the shipment of the goods. The seller must load the goods onto the buyer's designated ship at the specified port within the agreed-upon timeframe and notify the buyer promptly. Once the goods are loaded onto the specified ship at the port of shipment, the risk transfers from the seller to the buyer.
Because FOB requires the buyer to handle the ocean freight booking and specify a freight forwarder, it is advisable to choose the payment method of T/T (telegraphic transfer) or at least negotiate for a certain amount of advance payment. This ensures security in the transaction.
Trade Overview:
Trade refers to the general term for buying, selling, or exchanging goods or services. It typically denotes all exchange activities or transactions mediated by currency. This includes not only commercial exchanges involving commodities but also buying and selling activities organized by producers or other individuals. Trade encompasses both domestic trade within a country and international trade between nations.
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