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FOB – named port of shipment.
“Free On Board” means that the seller delivers when the goods pass the ships rail at the named port of shipment. This means that the buyer has to bear all the costs and risks of loss or damage to the goods from that point. (Official INCOTERM). Selling goods on a FOB basis enables the seller to get paid quicker as your responsibility ends once the cargo is loaded onto a ship or aircraft. From the date shown on the Bill of Lading or the Airway Bill the goods are the responsibility of the buyer. On arrival at the destination the buyer is responsible for all costs including unloading. If the buyer wishes to have the cargo insured whilst in transit it is the buyers responsibility also. As a buyer the benefit of buying FOB is that you control the shipping costs and you can determine the mode and routing of transport to ensure goods arrive when required and at a known price.

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