Within the United States, the term “FOB (Free On Board)” is commonly used when shipping goods to indicate who pays loading and transportation costs, and/or the point at which the responsibility of the goods transfers from shipper to buyer.
Variations: "FOB (Shipping Point)" or "FOB (Origin)" indicates the buyer pays shipping cost and takes responsibility for the goods when the goods leave the seller's premises. "FOB (Destination)" designates the seller will pay shipping costs and remain responsible for the goods until the buyer takes possession.
Note: FOB is not recommended for international shipments. FOB takes on a different meaning when used internationally. See alternatives below.
The following Incoterms are recommended for LM-relevant international shipments:
•FCA (Supplier Dock)
The seller delivers the goods export cleared to the carrier stipulated by the buyer or another party authorized to pick up goods at the seller’s premises or another named place. Buyer assumes all risks and costs associated with delivery of goods to final destination including transportation after delivery to carrier and any customs fees to import the product into a foreign country.
•DAP (Foreign Port)
Seller clears the goods for export and bears all risks and costs associated with delivering the goods to the named place of destination not unloaded. Buyer is responsible for all costs and risks associated with unloading the goods and clearing customs to import the goods into the named country of destination.
*Source for all Incoterms information: Export.gov
See additional .gov Incoterms references by clicking HERE.
New to Incoterms? View the free .gov Webinar by clicking HERE.
For additional information on LM Aeronautics purchase orders contact:
Gary Graves +1 817 777 8737
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