FOB Explained: Understanding Free-On-Board Delivery


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Have you ever heard about the incoterm of FOB in international shipping? Free-on-board delivery is one of the most important concepts that all shippers need to know before entering the shipping process. When you ship your goods using different means of transport via air freight or sea freight, the seller needs to sign a liability contract. Both buyers and sellers need to be aware of FOB while choosing the international shipping company in Dubai. In this quick guide, we will let you know everything about free onboard delivery for a better understanding:
What Is FOB.jpg

What is FOB?​

FOB is a term defined by the International Chamber of Commerce for deciding which part (typically a seller or buyer) will be liable for the damages or losses that occur during the shipment. Also, it is used to decide which party among the buyer or seller will bear the costs of insurance covers or shipping expenses.

Essential points of FOB shipping you need to know​

FOB Shipping Point

FOB shipping point is one of the most used FOB terms in the shipping industry. Under this, the entire liability of goods will be transferred from the seller to the buyer once it reaches the delivery carrier. The seller’s responsibility is to only bring the goods from the initial point to the carriers.

For instance, when a tech company in India buys products from abroad, the legal responsibility for the safety of the goods to the seller is only till it reaches the carrier. In case of damages, the buyers will be solely responsible during the delivery of the package. However, this does not happen with an international shipping company in Dubai. When you partner with 3PL shipping providers, they will take all the measures to protect your goods from damages and losses.

FOB Destination

FOB destination is the biggest weapon for buyers. Under this, the seller has to bear all the legal responsibilities and damages related to the goods for the entire shipping process. The legal responsibility of the goods is only transferred when the shipment reaches the buyer’s final destination.

FOB Shipping Point Cost

Under FOB Shipping point cost, the seller bears the complete responsibility of goods until it reaches the buyer’s delivery point. After this, the buyer will have to pay all the shipping costs, including custom duty charges, taxes, shipping fees, etc.

Why do you need a reliable shipping company?​

Understanding the various incoterms of the shipping industry is essential for both buyers and sellers. If you plan to grow your business globally, you need to know the basics first. With the help of the top international shipping company in Dubai, like SLR shipping services, you can get rid of all the hassle of shipping internationally. Do not risk your money and goods partnering with unskilled shipping companies for your extremely precious shipments.