Free on Board (FOB) is a term that is used in international trade to indicate the point at which the goods pass the ship's rail at the port of shipment.

The term “free on board” is commonly used in international shipping, where it refers to the point at which the goods pass the ship's rail at the port of shipment. This means that the goods are now on board the ship and ready for transportation to the destination.

The use of the term “free” in this context indicates that the seller is responsible for delivering the goods to the ship, and that the buyer is not responsible for any costs associated with this delivery. This includes the cost of loading the goods onto the ship, as well as any other costs or risks associated with getting the goods to the ship.

Once the goods have passed the ship's rail, the buyer becomes responsible for the goods, and is responsible for any costs or risks associated with their transportation to the final destination. This includes the cost of unloading the goods at the destination, as well as any customs or import fees that may be required.

In summary, the term “free on board” is used to indicate the point at which the goods pass the ship's rail at the port of shipment, and the responsibility for the goods shifts from the seller to the buyer. Understanding this term is important for ensuring the smooth and efficient transportation of goods in international trade.