As such, fOB shipping means that the supplier retains ownership and responsibility for the goods until they are loaded “on board” a ship. Once on the boat, all responsibility goes to the buyer. It is interesting to note that the delivery requirement was that the seller simply had to deliver the goods on board, but the cost allocation was that the seller would bear all the costs and risks until the goods went through the ship`s rail, resulting in decades of confusion and legal fees. How are costs and risks distributed on the spot when goods are suspended over the rail? Finally, the 2010 version adapted the costs and risks associated with delivery, removing the ship`s rail reference. In North America, FOB is entered into a sales contract to determine where the responsibility for the merchandise passes from the seller to the buyer. FOB stands for “Free On Board.” There is no position payment by the buyer for the fees that the goods can get on the transport. There are two possibilities: “FOB Origin” or “FOB Objective.” “FOB origin,” the transfer as soon as the goods are safe on board the transport. “FOB destination,” the change when goods are removed from transport to destination. “FOB-Ursprung” (sometimes called “FOB-Versand” or “FOB-Versandstelle” indicates that the sale on the seller`s shipping dock is considered completed and that the buyer of the goods is therefore responsible for the transport costs and liability during the transport. With “FOB-Ziel”, the sale is concluded at the buyer`s door and the seller is responsible for transportation costs and liability during transportation. [6] [7] The “FOB port” indication means that the seller pays to transport the goods to the port of embarkation plus the loading fee. The buyer pays for the cost of transporting sea freight, insurance, unloading and transporting from the port of arrival to the final destination. Risk transfer occurs when the cargo is loaded on board the port of embarkation.

For example, “FOB Vancouver” indicates that the seller must pay for the transportation of the goods to the Port of Vancouver, and the cost of loading the goods on the cargo ship (which includes domestic transportation, customs clearance, original documentation fees, dementia, if ever, the transfer costs of the original port, in this case Vancouver). The buyer bears all costs that go beyond that, including unloading. Responsibility for the goods rests with the seller until the cargo is loaded on board the vessel. Once the cargo is on board, the buyer takes the risk. Free on board (FOB) is a contractual clause that refers to the requirement that the seller delivers goods at the seller`s expense by a specified means to a destination determined by the buyer. If the seller has been asked by the buyer for information or documents that the buyer needs to ensure on-board loading, transportation, import formalities, insurance and transportation document, the buyer must reimburse the seller`s costs.