Incoterm quick guide

FOB shipping terms explained

Incoterms are developed to clarify who is responsible for the tasks, costs and risks involved in international trade. In this quick guide we will focus on the FOB shipping terms, and explain what they mean to you as an importer.

Within international commerce a number of international trading terms have been agreed upon, also called the Incoterms. Due to these 11 Incoterms it is always completely clear to both seller and buyer who will be responsible and pay for the seven parts of the transport process – no matter which part of the world you are trading with.

FOB or Free on Board is an international trading term, defining exactly when the costs, ownership and risk of any product transfers from the seller to the buyer. For FOB specifically transfer of these liabilities from seller to buyer happens at the time the product loads onboard the vessel, aircraft or train at the origin port, airport or terminal as agreed in the contract between seller and buyer.

FOB quick guide

In this video Transporteca's Founder and CEO, Morten Laerkholm, explains the basics of trading on FOB shipping terms.

It practice, this means that when you select the FOB shipping option on Transporteca, the price you get on the screen will include everything from the port, airport or terminal at origin to the specified delivery address at destination. This includes all transport costs as well as any costs associated with import customs clearance at destination.

By adding the expenses from your supplier and the transport cost from Transporteca, you can easily calculate your total landed cost.

For more information on the most common trading terms, see our post on Incoterms. You are also very welcome to get en touch by email, phone or chat – we are ready to answer any questions you might have.