Free on Board (FOB) is a shipment term used to indicate whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping. “FOB shipping point” or “FOB origin” means the buyer is at risk once the seller ships the product.

What Is Ex Works? Ex works is a term used in shipping arrangements where the seller is only required to deliver goods at a predetermined location, and the buyer bears responsibility for shipping costs.

Ex works price and Ex-factory price are on of the same term. Ex factory or Ex works term is one of the delivery terms used in exports and imports. Here the buyer appoints a shipping and freight forwarding company to collect goods from the seller’s factory to the buyers place including insurance of goods.

FOB shipping point, also known as FOB origin, indicates that the title and responsibility of goods transfer from the seller to the buyer when the goods are placed on a delivery vehicle. FOB shipping point is a further limitation or condition to FOB, as responsibility changes hands at the seller’s shipping dock.

What is the difference between EXW and FOB? In an EXW shipment, the buyer is responsible for all transportation charges and must collect the goods from the seller. In a FOB shipment, the seller is responsible for exporting and paying the costs to load the cargo onto the vessel.

FOB – free on board: The seller’s obligations are fulfilled when the goods have passed over the ship’s rail at the port of shipment. For contracts FOT (free on truck) and FOR (free on rail) this occurs when the goods have passed over the truck’s tailgate or the railcar’s loading gate.

When shipping FOB, you have total control over your freight costs. You have the benefit of hiring your own forwarder at an agreed freight rate, among other charges. You will also be able to get exact and timely information from your forwarder, hence solving any service issues or hassles during transit.

International Business. ‘Ex Works‘ or EXW means that the seller delivers when the goods are placed at the disposal of the buyer at the seller’s premises or another named place (i.e. works, factory, warehouse, etc.) not cleared for export and not loaded on any collecting vehicle.

Ex Works (EXW) Definition. Ex works is an agreement between a buyer and a seller that the seller assumes no responsibility for the cost or liability for a product after it is produced and has left the seller’s warehouse.

Ex-factory or ex-works price is the price of the goods just outside the factory gates. Earlier (before introduction of GST) it used to include excise duty. All other costs and taxes are extra and have to be borne by the buyer.

“FOB origin” means the purchaser pays the shipping cost from the factory or warehouse and gains ownership of the goods as soon as it leaves its point of origin. “FOB destination” means the seller retains the risk of loss until the goods reach the buyer.