FOB (delivery on board), also known as "delivery on board", is one of the commonly used trade terms in international trade. For the transaction under FOB conditions, the buyer is responsible for sending a ship to receive the goods, and the seller shall load the goods on the ship designated by the buyer at the port of shipment stipulated in the contract and within the specified time limit, and notify the buyer in time. When the goods are loaded on a named vessel at the port of shipment, the risk passes from the seller to the buyer.

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Risk control of FOB price

Because FOB is the buyer's responsibility for booking shipping space and the freight forwarder is the designated freight forwarder, it is best to choose T/T (advance payment) as the payment method of FOB, or at least get a certain advance payment, so as to ensure safety.

In some countries, the risk is relatively high. It often happens that the buyer and the designated forwarder collude with each other, take delivery without bill of lading, or give the bill of lading to the guests privately. This is too risky for the seller, so we must insist on TT full advance payment. Therefore, TT payment method and FOB terms of trade are a common combination, which can effectively control the potential risks under such terms of trade! Europe and America choose FOB more!

Reference source? Baidu encyclopedia-FOB