LogisticsFOB
FOB (Free on Board)
Also known as: Free on Board
An Incoterm indicating that the seller delivers goods on board the vessel designated by the buyer at the agreed port of shipment, transferring risks and costs to the buyer at that point.
Also known as: Free on Board
An Incoterm indicating that the seller delivers goods on board the vessel designated by the buyer at the agreed port of shipment, transferring risks and costs to the buyer at that point.
FOB (Free on Board) is one of the most widely used Incoterms in international ocean shipping. Under FOB, the seller fulfills their delivery obligation when the goods cross the ship's rail at the agreed port of shipment. From that point, the buyer assumes all costs and risks of transport, including ocean freight, insurance, and import expenses.
Under FOB, ocean freight and insurance are NOT included in the purchase price. To calculate customs value in Mexico, freight and insurance costs to the Mexican port must be added to the FOB price (CIF basis), as Mexico's Customs Law requires the augmented transaction value.
FOB is the most common Incoterm for ocean imports into Mexico. It is important for importers to understand that they must add freight and insurance to the FOB price to correctly determine customs value and calculate import duties.
CIF (Cost, Insurance and Freight)
An Incoterm indicating that the seller assumes the costs of ocean freight and insurance to the agreed destination port, although the risk of loss or damage transfers to the buyer upon shipment.
LogisticsIncoterms
International rules published by the International Chamber of Commerce (ICC) defining buyer and seller responsibilities for transport and delivery of goods.
TradeCustoms Value
The monetary amount on which import duties are calculated, determined according to the WTO Valuation Agreement with transaction value as the primary method.
DocumentsBill of Lading (Ocean)
Maritime transport document serving as a contract of carriage, receipt of goods, and document of title.