What is the meaning of FOB price?
Free On Board, in short FOB, is a term frequently used in shipping terms where the seller quotes a price including the cost of delivering goods to the nearest port. The buyer bears all the shipping expenses and is responsible to get the products from that port to its final destination. Freight. Unloading. Customs.
What is the difference between FOB and CIF price?
Meaning: FOB means free on board. The price includes all the expenses incurred until goods are actually loaded on board the ship at port of shipment. CIF stands for cost, insurance and freight. The seller meets cost of goods, freight and marine insurance.
Is FOB good for buyer?
FOB is usually the most cost-effective option for buyers. Buyers don’t have to pay a high fee to their sellers as they might with CIF. Buyers also have more control over the freight timing and cost, because they are able to choose their freight forwarder.
What does FOB mean on a purchase order?
Free on Board
Definitions. The term “Free on Board” F.O.B. is commonly used when shipping goods to indicate who pays loading and transportation costs, and/or the point at which the responsibility of the goods transfers from shipper to buyer. F.O.B.
What is an FOB?
FOB stands for “free on board” or “freight on board” and is a designation that is used to indicate when liability and ownership of goods is transferred from a seller to a buyer. Free on Board: Free on board indicates whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping.
What is included in FOB cost?
1 The costs associated with FOB include transportation of the goods to the port of shipment, loading the goods onto the shipping vessel, marine freight transport, insurance, and unloading and transporting the goods from the arrival port to the final destination.
Which is best FOB or CIF?
The terms are also used for inland and air shipments. CIF is considered a better way to buy goods for those who are new to international trade. The seller is also responsible for paying insurance for the goods. It is better to buy FOB for those who are already familiar with international trade.
What is the advantage of FOB?
Most buyers choose FOB because it’s arguably the most affordable or cost-effective option. Under the FOB terms, buyers do not usually pay the higher fees that CIF protection plans incur. With FOB, the buyer has more flexibility and control of the terms, the cost, freight shipping planning, and more.