free on board
Phrase (Adverbial): - Shipping and trade term: "free on board" (often abbreviated as F.O.B. or FOB) indicates that the seller is responsible for delivering the goods to a specified point (typically a ship, port, or other carrier) and covering all costs and risks up to that point. After the goods are loaded onto the transport, the buyer assumes all responsibility and costs for transportation, insurance, and any further risks.
- (The seller pays for delivery to the ship at Shanghai; the buyer pays for shipping beyond that.)
- (The seller is liable for expenses until the goods are on the ship.)
- (The buyer handles transport after the goods are loaded.)
"Free on board" in legal or commercial contracts: This term is part of Incoterms (International Commercial Terms) and defines precise points of risk transfer.
- The seller's obligation ends at the ship's rail under free on board terms. (The seller's liability stops once goods cross over the ship's side.)
"Free on board" as a pricing condition: Used to set the price of goods including delivery to a specific location.
- The quoted price is free on board the warehouse in Houston. (The price includes delivery to that warehouse.)
F.O.B. (abbreviation): the standard shorthand for "free on board".
- Please note the F.O.B. point is the factory gate. (The abbreviation is used in contracts.)
Free alongside ship (FAS): a related term where the seller delivers goods next to the ship, not on board.
- FAS differs from free on board in that the buyer handles loading. (A different Incoterm.)
- Delivered to the port: a descriptive phrase for the seller's responsibility.
- FOB origin: a specific variant where the buyer assumes risk from the seller's location.
FOB destination: the opposite of standard free on board; the seller retains risk until goods arrive at the buyer's location.
- With FOB destination, the seller pays shipping and insurance. (A variant term in trade.)
On board: meaning the goods are physically loaded onto the carrier.
- The bill of lading shows "on board" after the goods are placed on the vessel. (A related shipping term.)