FOB (Free on Board) — INCOTERMS 2020 | FreightUtils

Seller delivers goods on board the vessel at port of shipment. One of the most commonly used terms.

FOB — Responsibilities & Risk

Seller's Responsibility

Deliver goods on board the vessel at named port. Export clearance. Loading costs.

Buyer's Responsibility

Main sea freight, insurance, import clearance, duties.

Risk Transfer Point

When goods are on board the vessel at port of shipment.

Cost Transfer Point

At port of shipment, once loaded on board.

Insurance Obligation

No obligation on either party.

Export Clearance

Seller.

Import Clearance

Buyer.

Best For

Sea freight where buyer wants to arrange their own shipping and insurance. Very commonly used in international trade.

Watch Out

Sea and inland waterway ONLY. Despite being widely used, FOB is technically incorrect for containerised cargo — risk should transfer at the container terminal, not on board the vessel. ICC recommends FCA for containers.

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