Free One Board
FOB is a Incoterm which means Free One Board , that is to say in French Franco on board .
It is said that goods are bought or sold FOB when this one is bought without the transport costs and other expenses and taxes afférant there and without the Assurance S for these goods.
Consequently, when one buys an unspecified product at a price “FOB”, it is necessary then that one pays his transport and the taxes as well as the insurance charges for this product. The price “FOB” is thus always lower than the price " CIF " (Cost, Insurance and Freight).
CAUTION!
American INCOTERMS the USA (REVISED AMERICAN FOREIGN TRADE DEFINITIONS-1941, FOREIGN TRADE DEFINITIONS or COMMERCIAL UNIFORM CODES, UCC) do not have the same significance completely as the international INCOTERMS. Thus American who sells New York FOB to you, could explain you that means that the expenses of loading in New York are with your load (either almost as much as the ocean freight New York/Le Havre!) or FOB Las Vegas (which does not have a port) because it applies you “FOB valid Factory” only to the USA.
FOB American is interpreted in different ways, it is imperatively necessary to specify the delivery terms while stipulating in the contract “Incoterm FOB New York, International Chamber off Incoterms Trade”.
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