With free on board, the seller takes care of all the details that involve the delivery of the merchandise at the dock and the loading of this merchandise in the hold of the ship.
Free on board is a term used to describe a specific process of shipping goods. Sometimes referred to as freight on board or simply FOB, the process involves shipping the customer’s order via a ship requested by the buyer. The seller’s obligation is considered fulfilled once the order has been removed from the ship’s hold and deposited on the dock.
FOB establishes a chain of custody and responsibility for the freight.
The use of free shipping on board is common throughout the world. In practice, FOB helps establish the exact point in the delivery process when the seller relinquishes responsibility for the goods and the buyer assumes that responsibility. With this transport situation, the seller is responsible for any damage that occurs with the order until the moment the merchandise crosses the ship’s rail. From there, the seller is responsible for the condition of the merchandise.
For example, if the goods are shipped free on board, the seller will arrange for the goods to be shipped in a vessel that meets the buyer’s approval. The seller handles all the details related to the delivery of the goods to the dock and the loading of these goods in the hold of the ship. At the point of destination, the seller also ensures that the merchandise is removed from the warehouse and deposited on the dock. Once the goods are off the ship, the buyer must arrange to remove them from the dock and transport them to the buyer’s place of business, a process known as customer-arranged pickup.
If the goods are damaged while on board the ship, the seller is responsible for replacing them or refunding payments received on the order up to that time. If the goods are damaged while they are at the destination dock and are waiting to be picked up by the buyer, the seller is not responsible. Once the merchandise is off the ship used to transport the order, the seller is no longer responsible for the condition of any of the items included in the order.
It is important to note that the exact application of Free On Board Shipping may vary slightly from country to country. For this reason, buyers should always make sure they understand what the seller means by offering the free on board option. By obtaining detailed information on how the shipment will be handled and when the seller must take responsibility for the shipped goods, the chances of miscommunication between buyer and seller are greatly minimized.