Incoterms and shipping
FOB (Free on Board)
Definition
The seller delivers the goods on board the buyer's vessel at the named port of shipment, cleared for export.
FOB at a glance
- Transport
- Sea and inland waterway only
- Risk passes
- When the goods are on board the vessel at the port of shipment
- Insurance
- No obligation
FOB is one of the most used terms in chemical trade. The seller clears the goods for export and delivers them on board the vessel nominated by the buyer at the named port, for example FOB Nhava Sheva. Risk passes once the goods are on board and the buyer pays the ocean freight and insurance.
FOB is meant for sea and inland waterway transport. For containers, the ICC recommends FCA because the seller loses control of the box at the terminal, before it is loaded on board.
Related terms
- Incoterms 2020The ICC's eleven standard trade terms that set who pays for and bears the risk of each step of delivery.
- FCA (Free Carrier)The seller clears the goods for export and hands them to the buyer's carrier at a named place.
- CIF (Cost, Insurance and Freight)Like CFR, with the seller also buying minimum cargo insurance for the voyage.
- DAP (Delivered at Place)The seller bears costs and risk until the goods arrive at the named destination, ready for unloading.
- DDP (Delivered Duty Paid)The seller delivers to the named destination, cleared for import with duties and taxes paid.