The FOB incoterm is AKA first on board. True or False?

The statement that the FOB incoterm is also known as "first on board" is incorrect. FOB stands for "Free on Board," and this term is used to define the responsibilities of the buyer and seller in shipping goods. Under FOB terms, the seller is responsible for all costs and risks until the goods are loaded onto the vessel at the specified port. Once the goods are on board, the risk and responsibility transfer to the buyer.

In this context, "first on board" does not accurately capture the nuances of what FOB entails. The term could easily be misunderstood, leading to misinterpretations about the obligations of the involved parties. Understanding the precise terminology is critical in international trade, as it ensures clarity in contracts and helps avoid disputes over responsibilities and liabilities.