Incoterm abbreviation for Free On Board generally meaning the seller has to pay the cost of delivering the goods onto the ship (or vessel) at the specified port. Once the cargo crosses the ship or vessel’s rail, risk of loss, transport, and storage (e.g., demurrage) is the liability of the buyer (or the shipper depending on the buyer’s contract with the shipper). The term should only be used for sea and inland waterways, but is often also (mis)used in reference to airports. It is also often misunderstood as meaning that once the cargo has been delivered to the shipping company, risk of loss shifts—it does not shift until the goods are across the rail of the shipping vessel.

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