Trade & Incoterms
FOB (Free on Board)
An Incoterm where the seller delivers goods on board the vessel at the named port of shipment. Risk and cost transfer to the buyer once the goods are loaded. The buyer typically arranges ocean freight and insurance from that point.
In depth
Under FOB, the seller’s obligation ends when goods are on board the vessel at the port of shipment. The buyer nominates the carrier, pays ocean freight, and usually arranges marine insurance from the port of loading onward. FOB is widely used for bulk and breakbulk; for full containers many parties prefer FCA at the terminal.
Key points
- Risk transfers at the ship’s rail or on board: confirm port practice
- Seller handles export clearance unless contract says otherwise
- Buyer should verify vessel nomination and loading deadlines
- Not ideal when seller delivers to a CY/CFS: consider FCA instead