This also refers to costs for transport, loading, marine freight, unloading, and insurance. That is, from causing trouble and legal problems when assuming ownership and going through and paying costs of freight for international shipments. Therefore, FOB agreement compels a seller to dispatch goods on board a ship designated by the buyer in compliance with the customs laws of the port of origin.
FOB destination as well signifies that the seller covers the freight charges. That is, the shipment is now in the hands of the carrier designated by the importer at the mentioned place. Ease management of cash flow and working capital, iii. Another commonly used Incoterm is Ex Works shipping terms. Free On Board (FOB) is a shipment term used to indicate whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping.

Therefore, you should exercise caution when drafting the agreement in FOB shipping from China. Any developing issue after the goods have been ferried to the CFS loading facility or export terminal, is then the burden of the buyer. With this information, it will be easier for you to read from the same script when dealing with your freight forwarder. In addition, the seller arranges for the shipping of the consignments to the destination port and covers all the marine freight expenses. The importer ought to communicate to the supplier the details of the carrier vessel, date of delivery and any time limitations well in time before date of delivery. The FOB is going to look different depending on the terms of your agreement. When the supplier sells to your merchandise on FOB terms, they will factor in their local shipping costs in your final invoice.
The Incoterms FOB and FCA seem to be similar on the first glance. FCA can be applied in all modes of transport while FOB terms only apply to inland waterway and sea transport. The buyer assumes the reward and risks of ownership, which happens at the place of arrival at their destination harbor. Failure to plan is planning to fail, thus, it is in your best interest to practice due diligence. ‘On board’ simply means that the goods are on the ship. The seller must, depending on the conditions of B6, settle all expenses regarding the products till the moment they are loaded onto the vessel at the mentioned port of origin; and where appropriate, the costs of customs procedure required to export and also all taxes, duties and other fees payable when exporting. Les risques et frais sont transférés du vendeur à l'acheteur lorsque les marchandises sortent du bateau ou de l'avion. It is basically where the shipping line shall get the consignment into their control. Shipping on FOB terms presume the commodities are delivered once they have been lifted onto the vessel.