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Free on Board (FOB)

Free on Board (FOB) is an international trade term used in shipping to indicate the transfer of ownership and responsibility of goods from the seller to the buyer at the point the goods cross the ship's rail at the port of shipment. The buyer is responsible for the cost and risks associated with transporting the goods from that point on. This term is commonly used in incoterms, a set of international trade terms developed by the International Chamber of Commerce (ICC).