Free On Board (FOB)

Knowledge Center

What is Free On Board (FOB)? Meaning.

Free On Board (FOB) is an international sales term used in the transportation industry meaning that the seller fulfills his or her obligation to deliver a commodity when they have passed a specified loading point during a certain time period. The price includes loading the commodity on the transportation vehicle of the buyer. Also the FOB term requires the seller to clear the goods for export. It is a form of geographical pricing.

The risk of loss or damage is transferred to the buyer when the goods are loaded, so the buyer must ensure transportation and insurance from the loading point and must clear customs in the country of import. Furthermore, when counting inventory, merchandise in transit plays a crucial role depending on whether it is added to the company's balance sheet.

Note that because this is a legal term, its exact definition is much more complicated and can differ by country.

Forum New Topic Forum about Free On Board (FOB). 🔥 NEW Free on Board (FOB) in Accounting Usage In accounting usage, - FOB Shipping Point means the receiver (or buyer) of the goods pays the shipping costs. (...) 129   Who Initially Bears the Costs in Free On Board? Who will bear all the costs iniatially? What happens after that? (...) 113   1 comments Start a new forum topic about Free On Board (FOB). More info. Share your opinion, knowledge and experience or ask a question (sign up for free first)

Expert Tips Sign up Advanced insights about Free On Board (FOB). Here you will find professional advices by experts. Who Bears the Goods' Damage Risk? - INCOTERMS 2020 Transportation, Insurance, International Trade, Import, Export of Goods, Risk of Damage, Freight Terms In order to ensure the company's continued activity and the implementation of its objectives, managers always find thems (...)

Information Sources Sign up Various sources of information regarding Free On Board (FOB). Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.

Research Links Sign up Automatically jump to further useful sources regarding Free On Board (FOB). News Videos Presentations Books More

Compare with: Cost, Insurance and Freight

Return to Management Hub: Supply Chain & Quality

More on Management  |  Return to Management Dictionary

This ends our Free On Board (FOB) summary and forum.