FOB (Free On Board)

Seller delivers the goods on board the vessel at the named port; cost and risk transfer there.

What it changes for you

The FOB port and the quantity it applies to must be stated, or two quotes are not comparable.

In practice

FOB means the seller's responsibility ends when the goods are on board the vessel at the named port. In a tackle quotation the port matters as much as the price: Ningbo and Qingdao do not produce the same landed cost, and a quotation that says only "FOB" without a port and a quantity cannot be compared with another. FOB is usually the easier starting point for a buyer with no local presence in China, because the factory handles export clearance and delivers to the port.

Questions about FOB

Is FOB or EXW cheaper?

Neither is inherently cheaper; they price different scopes. An EXW number excludes inland freight, export clearance and terminal handling that an FOB number includes, so EXW looks lower while covering less. Compare landed cost at the same Incoterm.

What has to be written on an FOB quotation?

The named port, the order quantity the price applies to, and what is included in terminal handling. Without all three, two FOB quotes still cannot be compared.

Other terms

• EXW (Ex Works) - Buyer collects at the factory gate.
• MOQ (Minimum Order Quantity) - The smallest quantity a factory will run for one specification.
• Tooling cost - The one-off cost of the injection mould, die or print plate.
• Colourway tolerance - The measured range a factory will hold between sample and repeat production.
• AQL (Acceptable Quality Limit) - The sampling standard (ISO 2859-1) defining allowed defects per inspected lot.
• HS heading 9507 - The Harmonized System heading covering fishing rods, hooks, reels and artificial bait.

Send a specificationAll 14 terms