Definition of FOB: Free On Board or Freight On Board (named loading port), seller take all the responsibilities and pay all the costs before the goods get on the board.

For example, the meaning of “FOB Shanghai ” is the seller will pay for transportation of the goods to the port of Shanghai, and the cost of loading the goods on to the cargo ship (this includes inland haulage charges, Customs clearance, origin documentation charges, demurrage if any, origin Port handling charges, in this case Shanghai).

The buyer will take on the sea freight, the insurance if need, unloading cost, Customs clearing cost of destination port and the freight from the port to the warehouse.