What is FOB (Free on Board) and who is responsible for the cargo?

FOB (Free on Board) is one of the most commonly used Incoterms in China trade. Under FOB terms, the seller (your Chinese supplier) is responsible for the goods up until the moment they are loaded on board the vessel at the named port of shipment (e.g., FOB Shanghai). Once the goods are on board, all risk and cost transfer to you, the buyer. This means: you are responsible for arranging ocean freight, marine cargo insurance, and import customs clearance in Russia. FOB price in the invoice = cost of goods + cost of transport to the port in China + export customs clearance in China. To calculate the customs value for Russian customs: add ocean freight and insurance to the FOB price (this gives you the CIF value at the Russian border). Key advantage of FOB for buyers: you control the choice of freight forwarder and negotiate freight rates directly, which often results in better rates than if the seller arranges freight. Important: FOB applies only to sea or inland waterway transport. For air or road freight, use FCA instead.