Answered By Suzanne Morgan, founder, Print Buyers Online.com

Question:
What does F.O.B. mean?

S.C.

Answer:
Free On Board. FOB is a shipping term, meaning 'Free on Board', used when clarifying prices for import/export. It means the seller is liable for the goods and responsible for all costs of insurance, transport, insurance, etc, until and including the goods being loaded at the port. A buyer will normally ask for the FOB price, knowing that this price is free of any extra costs of getting the goods from the seller to the port and on board the craft or vessel. From the seller's point of view an FOB price must include/recover his costs of transport from factory or warehouse, insurance and loading, because the seller is unable to charge these costs as extras once the FOB price has been stated. It originates from the meaning that the buyer is free of liability and cost up to the point that the goods are loaded on board the ship.

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