In commerce, the term “franco” refers to a practice where the sender assumes responsibility for the delivery of goods, including postage and freight. In return, the buyer pays a single, fixed price, regardless of the various factors affecting delivery, such as consolidating shipments, transport, or packaging. This approach contrasts with the concept of “ex-works,” where delivery costs are borne by the recipient from the moment the goods leave the supplier’s warehouse.
Originally, the expression “franco” derives from the Italian verb “affrancare,” which translates to “to affix” or “to postage.” This is why the term is also used in the context of sending letters, where the sender pays the postage at the time of affixing a stamp.
In the commercial sphere, the isolated use of the word “franco” has been replaced by the expressions “franco domicile” (paid to address) or “franco de port” (paid postage). This terminology is commonly used in European trade to signify that goods are sold free of charge or exempt from any additional fees.
The concept of “free on board” can have various meanings depending on the context. For example, a “free on board” shipment indicates delivery from the port, while a “free on board” price includes shipping and packaging costs. In finance, a “free on board” banking transaction refers to a transaction without interest or commissions.
When used in conjunction with other terms, such as “free on board” or “free on board,” the term “free on board” can take on specific nuances corresponding to particular situations of use.
Although not codified, the term “free on board” is not considered an Incoterm, which is a set of standardized terms used in international trade.
The various delivery methods using the term “
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