What is FOB?
FOB can be defined as the point at which ownership and responsibility for goods shift from the seller to the buyer. It indicates the specific location where the seller fulfils their obligation to deliver the goods to a designated mode of transportation, typically a vessel, airplane, or truck. Once the goods are loaded onto the specified transport, any risks, costs, and liabilities associated with the shipment transfer to the buyer. FOB terms are crucial in international trade contracts as they help determine who is responsible for various aspects of the shipping process and can have significant implications for the overall cost and logistics of the transaction.