Free on board is not free: Who is liable for landside moves during international shipping

Free or Freight on Board (FOB) defines the point at which ownership, cost and liability of shipped goods transfers from the exporter (seller) to the importer (buyer). Buyers and sellers negotiate FOB terms in advance as part of the purchase order, agreeing on when possession and risk change hands and who pays for transportation, insurance, and related costs. 

FOB terms also spell out delivery details such as timing, locations, quality expectations, and responsibility for landside and cross-border transport.  

While the term may sound simple, FOB decisions have a significant impact on cost, control, and risk. 

FOB origin vs FOB destination 

There are two main types of FOB: FOB origin and FOB destination.  

FOB origin means the buyer is responsible for the shipped goods once they are safely on board the transport, whether that be at the seller’s location or more often, the marine terminal.  

FOB destination means the seller retains responsibility of the goods until they reach the buyer.  

There are advantages and disadvantages to both that involve insurance, custom duties, and choosing landside transport providers, freight forwarders, and ocean carriers. 

How buyers and sellers determine FOB terms 

Choosing between FOB origin and FOB destination requires both the buyer and the seller to assess cost, risk, and control. 

The party that takes responsibility controls the shipment. They choose freight forwarders and carriers, negotiate rates, and manage transportation once the goods are loaded. That control can help manage costs and timing, but it also means accepting liability for loss or damage and owning any disruptions in transit. 

With that responsibility comes additional operational load. This includes arranging landside transport, managing export documentation, securing insurance, handling customs clearance, and resolving issues as they arise. For long-distance or high-volume shipments, this effort adds cost and complexity that must be factored into the commercial agreement. 

The party that does not take responsibility avoids liability, but sacrifices control and visibility. They are dependent on the other party’s logistics decisions and timelines, with limited ability to influence outcomes once the shipment is underway. 

The often-overlooked landside reality 

Regardless of whether FOB origin or FOB destination is chosen, the exporter is typically responsible for moving the goods to the marine terminal. This requires coordinating container drayage to deliver an empty container to the warehouse and then transporting the loaded container back to the terminal. 

The exporter bears the cost, risk, and coordination effort for these landside moves. When those costs are high or unpredictable, margins suffer and operational complexity increases. 

For exporters taking on FOB destination, those costs, risks, and coordination challenges are effectively doubled. 

Reducing landside costs with CargoWise Container Transport Optimization 

CargoWise Container Transport Optimization reduces the cost and operational effort of landside container transport by eliminating inefficiencies at the source. 

In a single click, exporters can source empty containers from unpacked imports to be delivered directly to the export warehouse, removing unnecessary repositioning, storage, and empty legs. Once packed, containers move straight to the marine terminal without detours or additional handling. 

Transport jobs are automatically assigned to optimal providers, with inefficient routing removed upfront. Live milestones and status updates provide visibility across each move, helping teams manage exceptions before they become delays or penalties. 

For exporters, that means fast, low-fixed-cost container transportation with better visibility and without unexpected fees or penalties. Resulting in stronger margins, fewer surprises, less hassle, and happier customers. 

The same efficiencies apply to importers responsible under FOB origin, whether moving full containers to or from their warehouse or returning containers to the empty container park. 

Making FOB work for your business 

FOB terms determine where liability changes hands, but they do not eliminate landside responsibility. Containers still need to be sourced, moved, returned, and paid for, regardless of who owns the risk on paper. 

For both importers and exporters, landside transport is where margin is most easily lost. Inefficient routing, empty repositioning, detention exposure, and manual coordination quickly turn FOB decisions into unpredictable cost. 

No matter where FOB responsibility sits, controlling landside container movement is critical. CargoWise Container Transport Optimization simplifies container sourcing and transport in a single click, reducing cost volatility and operational effort. 

FOB defines liability. Landside execution determines profitability. Cut the cost of your landside container moves with CargoWise Container Transport Optimization.