Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

FOB -Meaning

Sudhakar (Chartered Accountant) (58 Points)

02 February 2008

Whether the meaning of FOB -Some authors have given the definition as Fright on board and some have given as Free on Board.Which is correct.

Reply
Follow
Share

21 Replies

Sumeet (Student) (23 Points)
Replied 02 February 2008

AS FAR AS MY KNOWLEDGE IS CONCERNED FOB STANDS FOR FREE ON BOARD. FOB INCORPORATES THE COST+INSURANCE+FREIGHT (CIF) AND UNLOADING AT THE DESTINATION. THEREFORE, NOT ONLY FREIGHT BUT A FEW OTHER THINGS ALSO COME INTO THE CONSIDERATION OF FOB AND IT FREE ON BOARD AND NOT FREIGHT ON BOARD.

Upgrade to CAclubindia Pro. Subscribe Now!

CA Manoj Kumar Jain (Service) (70 Points)
Replied 02 February 2008

FOB is one of the term in INCOTERM, use in international trade, it means Free on Board. This implies that exporter will incurred the below expnese = Primary Packing+Export Packing+Carriage to port+port due(Departure Expenses)+Export duty (if there is any) and import will make the payment of =freight+insurance+import duties and taxes+port costs+carriege from port

CA Manoj Kumar Jain (Service) (70 Points)
Replied 02 February 2008

FOB is one of the term in INCOTERM, use in international trade, it means Free on Board.
This implies that exporter will incurred the below expnese
= Primary Packing+Export Packing+Carriage to port+port due(Departure Expenses)+Export duty (if there is any)
and import will make the payment of
=freight+insurance+import duties and taxes+port costs+carriege from port

CA Kranthi Kumar Suryadevara (CA) (125 Points)
Replied 03 February 2008

i agree with what manoj said.

CA Mohit Mohan (c.a. profession) (557 Points)
Replied 03 February 2008

true

Upgrade to CAclubindia Pro. Subscribe Now!

Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 03 February 2008

A pricing term indicating that the quoted price includes the cost of loading the goods into transport vessels at the specified place.
www.ams.usda.gov/TMD/export/glossary.htm
------------------------------------------------
Under this Incoterm, the seller must pack and deliver the goods on board a vessel named by the buyer cleared for export at the port named in the contract of sale at the stipulated time. The seller must also give the buyer sufficient notice that the goods are safely on board. ...
www.zygo.ltd.uk/incoterms.htm
=============================
Free on board/Free on truck, whereby the quoted price for physical material includes all costs incurred in getting the metal to and loaded onto the means of transport.
www.lme.com/glossary.asp
=======================================
at a named port of export where the seller quotes the buyer a price that covers all costs up to and including the loading of goods aboard a vessel.
www.unzco.com/basicguide/c11.html
===============================================
Indicates that all delivery, inspection and loading costs involved in placing commodities on board a carrier, (private or common), have been paid by the seller.
www.oilintel.com/glossaryHome.cfm
================================================
The merchandise is placed on board the ship by the seller . The buyer indicates the ship and pays the freight. Transfer of expenses and risks is effected at the time when the merchandise passes from the slings of the ship. The export formalities devolve upon the seller.
www.interexlebanon.com/pages_multi/incoterms_ang.htm
===============================================
Stands for “Free on Board” without charge for delivery to and placing on board a carrier at a specified point; the point at which the shipping charge is calculated.
nationalenvelope.com/prod/Glossary_F.htm
=====================================================
freight on board; the pInt in time at which the recipient of a shipment becomes legally responsible for the shipment
www.traditionalharps.com/HarpsGeneralGlossary.html
====================================================
A short chain with a decorative seal or other device attached to the end. The fob and chain hung outside watch pocket, and could be used to pull the watch out of the pocket.
www.daysofelegance.com/glossary.html
=================================================
Free on board; without charge to the buyer for goods placed on board a carrier at the point of shipment.
rainydaytrader.com/GlossaryOfTradingTerms.html
==============================================================
An acronym for "free on board" when used in a sales contract. The seller agrees to deliver merchandise, free of all transportation expense, to the place specified by the contract. Once delivery is complete, the title to all the goods and the risk of damage become the buyer's.
www.roadway.com/shippers/glossary.html
=================================================
The price of a traded good excluding transport cost. It stands for "free on board," but is used only as these initials (usually lower case: fob). ...
www-personal.umich.edu/~alandear/glossary/f.html
==========================================================
Canadian exports and imports are valued FOB (Free on Board), place of direct shipment from/to Canada. It excludes freight and insurance costs in bringing the goods to Canada from the point of direct shipment.
www.bcstats.gov.bc.ca/glossary.asp
================================================================
is an acronym for free on board, which is a common way of stating the terms of delivery for sales of goods. Terms of delivery are relevant for purposes of the place-of-supply rules outlined in Chapter 4.
www.fin.gc.ca/hst/hstglo-e.html
===========================================================
Free On Board, a bid, offer or quoted market which does not include the cost of delivery. Usually associated with a particular region or plant.
www.urnerbarry.com/glossary.htm
=================================================================
Usually covers all delivery, inspection, and elevation costs involved in putting commodities or products on board whatever shipment conveyance is being used.
www.extension.iastate.edu/AGDM/wholefarm/html/c3-06.html
========================================================
this is a particular type of campaign item used to attach to a top of a pocket watch. A fob would hang out of a gentleman’s pocket where he kept his pocket watch. Some fobs were all metal while others has the appearance of a celluloid button attached to a cardboard backing. ...
apic.us/Resources/GlossaryofTerms/tabid/262/Default.aspx
========================================================
Free on Board. A FOB price usually includes cost of transport, insurance and loading onto a vessel at the port of departure.
www.lbma.org.uk/london_glossary.html
============================================================
Export price including loading and port charges. The seller is obligated to place the goods aboard a named carrier at a specified port, obtain a clean bill of lading attesting to this performance, and pay the freight charges of inland carriers.
www.usaid.gov/our_work/humanitarian_assistance/ffp/crg/annex-1.htm
==============================================================
Free on board.
www.clearwater.ca/inv-invservices-e.asp
=========================================================
A small charm, amulet or trinket that hangs on a chain. Fold-Over Clasp: A hinged clasp used on necklaces and bracelets where a piece hinges and clips to closure. Four Cs: Key indicators in diamond grading and quality. They include “Cut,” “Color,” “Clarity” and “Carat weight. ...
www.oceanajewelry.com/jewelry_terminology_s/12.htm
=============================================================
A trade term requiring the seller to deliver goods on board a vessel designated by the buyer. The seller fulfills his obligations to deliver when the goods have passed over the ship's rail.
news.firstdata.com/glossary.cfm
============================================================
The seller (exporter) is responsible for delivering the goods from his place of business and loading them onto the vessel of at the port of export as well as clearing customs in the country of export. ...
www.nextlinx.net/incoterms/incotermsEng.html
===========================================================

1 Like

Amit Sharma (article) (2677 Points)
Replied 04 February 2008

FOB:- Free on board. Where in expenses are incurred by both EXPORTER & IMPORTER

Ramesh Kothari (Manager-EOU commercial) (161 Points)
Replied 10 February 2008

INCOTERMS 2000 FOB means free on board the exported goods to be deliver inclusive of all cost up to the port of loading and same has to be loaded into the on going vessel It means the goods which is to be deliver includes Cost of Materai+Packing cost+Local Transport to Port+Port charges Regds rameshkothari2159 @ rediffmail.com

Shaily Jain (Chartered Accountants) (1054 Points)
Replied 11 February 2008

it's Free On Board

(Guest)

Free on board

Upgrade to CAclubindia Pro. Subscribe Now!

ravindra kumar yadav (Accountant) (32 Points)
Replied 15 March 2008

FOB MEANS.

FREE ON BOARD

GOPALA KRISHNA TUMMA (Manager - Commercial) (38 Points)
Replied 18 March 2008

FOB {+ the named port of origin}
Free On Board

The delivery of goods on board the vessel at the named port of origin (loading), at seller's expense. Buyer is responsible for the main carriage/freight, cargo insurance and other costs and risks.

In the export quotation, indicate the port of origin (loading) after the acronym FOB, for example FOB Vancouver and FOB Shanghai.

Under the rules of the INCOTERMS 1990, the term FOB is used for ocean freight only. However, in practice, many importers and exporters still use the term FOB in the air freight.

In North America, the term FOB has other applications. Many buyers and sellers in Canada and the U.S.A. dealing on the open account and consignment basis are accustomed to using the shipping terms FOB Origin and FOB Destination.

FOB Origin means the buyer is responsible for the freight and other costs and risks. FOB Destination means the seller is responsible for the freight and other costs and risks until the goods are delivered to the buyer's premises, which may include the import customs clearance and payment of import customs duties and taxes at the buyer's country, depending on the agreement between the buyer and seller.

In international trade, avoid using the shipping terms FOB Origin and FOB Destination, which are not part of the INCOTERMS (International Commercial Terms).