FOB (Free On Board)

FOB (Free On Board) stands as the most commonly used Incoterm in international textile trade, and for good reason. Under FOB terms, the seller fulfills their obligation once the fabric crosses the ship's rail at the named port of shipment—whether that's Ningbo, Shanghai, or any other export hub. From that moment, the buyer assumes all risk and cost for the ocean voyage and beyond.

The appeal of FOB for experienced textile importers lies in the control it provides. By taking responsibility for ocean freight, buyers can negotiate volume discounts with shipping lines, choose preferred carriers and routes, and consolidate shipments from multiple suppliers into single containers. A buyer sourcing from three different mills can have all goods delivered FOB to the same port, then combine them efficiently for the transpacific crossing.

The seller's responsibilities under FOB include export clearance, inland transportation to the port, and loading the goods onto the vessel. They must provide a commercial invoice and packing list, and typically assist with obtaining the bill of lading. Once the goods are on board, the seller's job is done.

The buyer then takes over: nominating the vessel, paying ocean freight, arranging cargo insurance, and handling import clearance at the destination. This division works well when buyers have established logistics partnerships and want predictable shipping costs across their supply chain.

When a supplier quotes "FOB Ningbo USD 2.50/meter," that price includes everything up to and including loading onto the ship at Ningbo port. Ocean freight, insurance, and destination charges are additional.

Buyers should always specify the exact port in FOB quotations, since inland freight to different ports varies significantly. It's also worth clarifying who pays for container stuffing and terminal handling charges at origin, as practices differ between suppliers.