What Is FOB? Free On Board Explained for Produce Buyers | DS

By Arturo Peguero | International Trade Specialist | Former Dirección de Comercio Exterior | Former International Trade Professor

Last updated: June 2026

Quick Answer: FOB (Free On Board) is an Incoterm where the seller delivers goods loaded onto the vessel at the origin port, and the buyer takes on cost and risk from there: ocean freight, insurance, and import clearance. It is the most common term Dominican Republic produce exporters quote, so a buyer’s landed cost is the FOB price plus freight, duty, and clearance.

What Is FOB?

FOB stands for Free On Board. It is one of the Incoterms published by the International Chamber of Commerce, the standard rules that define who pays for and who bears the risk on each leg of an international shipment. Under FOB, the seller’s responsibility ends once the goods are loaded onto the ship at the named port of origin. From that moment, the buyer owns the cost and the risk: ocean freight, marine insurance, destination-port charges, and customs clearance.

For Dominican Republic fresh-produce exports, FOB is the default quote. An exporter prices what it controls, the product, the packing, and trucking the load to the origin port (typically Caucedo or Rio Haina). The buyer, who knows its own destination port and has its own freight contracts, arranges the ocean leg. That division is why a buyer evaluating Dominican produce should never compare two suppliers on FOB price alone: the real number is the landed cost, FOB plus freight plus duty plus clearance.

FOB vs CIF vs EXW

The three terms a produce buyer meets most often differ by how much of the journey the seller covers:

• EXW (Ex Works): the seller makes the goods available at its own facility. The buyer handles everything from the factory gate, including inland trucking to the port. The least seller responsibility.
• FOB (Free On Board): the seller delivers loaded onto the vessel at the origin port. The buyer takes the ocean leg onward. The Dominican produce default.
• CIF (Cost, Insurance, Freight): the seller arranges and pays ocean freight and insurance to the destination port, building it into the price. Simpler for a buyer new to the lane, but it hands freight control to the seller.

A practical rule for the Dominican lane: if a supplier quotes CIF, ask for the FOB price separately so you can compare it against your own freight quote. Freight is often where landed cost actually moves. Ocean container rates swing with peak-season demand and fuel, so a buyer with its own forwarder contract may beat a seller’s built-in CIF freight.

Why FOB Matters for Dominican Republic Sourcing

Because Dominican exporters quote FOB, the trade lane’s competitiveness comes down to two buyer-side numbers stacked on top of it: freight and duty. On duty, fresh produce from the Dominican Republic enters the United States at 0% under CAFTA-DR, per the USDA Foreign Agricultural Service, so that variable is removed entirely for US buyers. On freight, sea transit from the Dominican Republic to Port Everglades runs about 4 days, per Port Everglades, one of the shortest reefer lanes into the US from any tropical origin. A low FOB on a short, duty-free lane is what makes the math work.

Comparing FOB quotes from Dominican suppliers? We verify exporters, confirm current FOB pricing and certifications, and make the introduction so you can build a clean landed-cost comparison. Send a sourcing inquiry →

Frequently Asked Questions

What does FOB mean? FOB stands for Free On Board, an Incoterm under which the seller delivers the goods loaded onto the vessel at the named port of origin. From that point the buyer assumes cost and risk, including ocean freight, insurance, and import clearance. It is the most common term quoted by Dominican Republic produce exporters.

What is the difference between FOB and CIF? Under FOB, the buyer arranges and pays for ocean freight and insurance from the origin port. Under CIF, the seller arranges and pays freight and insurance to the destination port and builds that into the quoted price. FOB lets a buyer control freight cost through its own forwarder; CIF is simpler for buyers new to a trade lane.

Why do Dominican exporters quote FOB? FOB lets the exporter price only what it controls: the product, packing, and delivery to the origin port. The buyer, who knows its own destination and freight contracts, handles the ocean leg. This is the default for Dominican Republic fresh-produce exports, which is why a landed-cost calculation starts from the FOB price plus freight, duty, and clearance.

Related Terms

• CAFTA-DR: the trade agreement giving Dominican produce 0% US duty
• GlobalGAP: the certification baseline buyers ask exporters to hold

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About the author: Arturo Peguero is the founder of DominicanSources, former official at the Dirección de Comercio Exterior and International Trade Professor at PUCMM with 20+ years in Dominican trade.