Related Glossary
What is FOT (Free on Truck)?
FOT, also known as “Free on Truck,” is a delivery term used in logistics and trade where the seller is responsible for delivering goods to a specified truck or carrier at an agreed location, such as a factory, warehouse, or terminal. Once the goods are safely loaded onto the truck, the risk, responsibility, and cost shift from the seller to the buyer. After this handover, the buyer is responsible for transportation, insurance, customs, and any further logistics activity.
Key Points
The seller pays for goods handling up to the loading point.
Responsibility transfers to the buyer as soon as the goods are on the truck.
Mainly used for inland shipments, domestic movement, and multi-modal logistics setups.
Risk transfer happens at the moment of loading, not during travel.
Can be used with road-based transport in container yards, freight stations, or factory gates.
Benefits & Challenges
One major benefit of FOT is its clarity in responsibility. The seller has control of goods only until the loading moment, reducing their exposure to logistics risks such as road accidents or freight delays. It is cost-efficient for buyers who already have better transport contracts or access to discounted freight rate management software. Buyers also gain flexibility to negotiate their own carriers, track transport digitally, and integrate with freight forwarding software for billing accuracy.
However, challenges arise when loading is not clearly documented. Disputes happen if damage is found after loading, but neither side can prove when it occurred. Buyers must manage their own transport coordination, leading to potential delays, especially without proper tools like Carrier Management systems. Miscommunication in handover timing can also cause demurrage-style charges or idle trucking costs.
Example Scenario
A textile manufacturer in Mumbai sells fabric rolls to a distributor in Delhi under FOT terms. The manufacturer’s team loads the goods onto the distributor’s assigned truck at the factory. At that moment, risk and cost pass to the distributor. If the truck faces delays or damage during transit, the manufacturer holds no responsibility, as the handover happened successfully at loading.
Conclusion
FOT is an important delivery term in freight forwarding because it clearly defines where responsibility ends for the seller and begins for the buyer. It minimizes disputes when paired with digital proofs and aligns well with modern workflows like multimodal transport tracking and automated transport documentation. For freight forwarders, understanding FOT ensures accurate cost allocation, reduced liability, and smoother carrier coordination.
Frequently Asked Questions (FAQs)
1: Is FOT the same as FOB?
No. FOB applies to sea shipments where transfer happens at the ship’s rail, while FOT applies to goods loaded onto a truck.
2: Who pays transport charges after loading?
The buyer pays all costs from the loading point onward.
3: Who handles insurance under FOT?
The buyer must arrange insurance once the goods are loaded on the truck.
4: What if goods are damaged while loading?
Damage during loading remains the seller’s responsibility until handover is complete.
5: Does FOT apply internationally?
It can, but is more commonly used in domestic or inland logistics.
Additional Insights
In modern supply chains, FOT becomes easier to manage when paired with digital documentation and real-time visibility tools. Many forwarders use freight management software to store loading proof, assign trucks, and maintain audit trails. When integrated with warehouse operations or a Freight Customer Portal, it reduces disputes and speeds up billing cycles. As logistics moves toward digital freight forwarding, terms like FOT gain even more relevance because visibility, automation, and proper cost allocation rely heavily on clear handover points.
If you're learning logistics, understanding terms like FOT helps you evaluate liability, optimize cost, and streamline operations across trucking, warehousing, and carrier coordination.