FOB
What it is
Under FOB the seller delivers to the named port of shipment and clears export; risk passes once the goods are on board. It applies to sea and inland waterway transport, and with containerised cargo the exact moment of 'on board' is where disputes start.
Why it matters
FOB is a good comparison basis because it separates China-side cost from post-ocean cost, making factory quotes comparable. It is not the cheapest term: without a forwarder in China, everything after FOB is still yours to arrange.
Three points
- An FOB price should include export declaration, loading and port handling — not ocean freight or insurance
- With LCL, 'FOB' often actually turns at the CFS receiving point; confirm it
- When comparing, check whether marks, pallets and securing charges are included
Three common traps
- Reading FOB as a landed price and forgetting ocean freight, insurance and destination charges
- Comparing FOB numbers from different ports, which is meaningless
- Ignoring peak-season space and surcharges, so landed cost lands far above the quote
What we do about it
Our FOB quote comes with a landed-cost estimate: ocean freight, insurance and typical destination charges for your port, so you see the gap between the two numbers rather than only the prettiest one.
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