Free on Board (FOB) designation indicates whether the buyer is responsible for freight and defines the obligations of the parties under trade in goods. There are two main types FOB cargo FOB destination and point—with keychain shipping several sub-designations.
Free on Board-international trade term, under the rules of Incoterms published by the International chamber of Commerce (ICC). The costs associated with a keyring to enable the transportation of the goods to the port of shipment, loading cargo on the vessel delivery, Maritime transport, insurance, unloading and transportation of cargo from the arrival port to the final destination.
Types of free on Board point
Free on Board makes the seller responsible until until the package will arrive, including the cost of lost or damaged cargo. There are several different ways of destination FOB expenses can be processed.
FOB freight prepaid and allowed specifies that the seller must pay the costs of transportation and owns the goods while they are in transit. The seller assumes the risk of loss or damage to the goods during carriage. Title to the goods passes to the buyer at the place of business of the buyer.
FOB freight prepaid and added that indicates that the seller must pay the costs of transporting goods. However, the seller of bills, transportation cost to the buyer. The seller assumes the risk of loss of or damage to the goods during carriage because the seller is the owner of the goods during transport. Title to the goods passes to the business customer.
FOB freight indicates that the buyer must pay freight of the transport when the buyer receives the goods. However, the seller assumes the risks associated with the transportation of goods, since the seller is not yet owner of the goods during transport.
FOB freight allowed: specifies that the buyer must pay the cost of transporting goods. However, the buyer deducts the cost from the invoice of the seller. The seller is responsible for the goods, because the seller still owns the goods during the carriage.
Free on Board shipping point
Point FOB shipping relieve the seller from any responsibility for the goods after the goods arrive at the delivery vessel. This makes the buyer responsible for the goods during transportation, which means they cover transport costs and may wish to purchase insurance to protect yourself if any shipment is lost or damaged.
(For associated reading, see: what is the difference between the freight on Board (FOB) shipping point and destination?)