What Does FOB Mean in Freight?

FOB, or Free On Board, is a shipping term used in international trade to indicate who is responsible for the goods at various points during transport. Under FOB terms, the seller is responsible for the goods until they are loaded onto a transport vehicle (usually a ship) at the specified departure port. Once the goods are loaded, the responsibility shifts to the buyer. This includes risks of loss or damage as well as any additional transportation costs. The FOB term also requires the seller to clear the goods for export. FOB is one of the Incoterms (International Commercial Terms) established by the International Chamber of Commerce to facilitate international trade.