Free On Board
Seller loads the goods on the vessel at the named port; risk transfers on board.
Under FOB, the seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment. Risk transfers when the goods are on board. The buyer pays the main carriage and handles import clearance.
FOB is sea-only and is one of the most commonly used Incoterms for bulk and break-bulk shipments. For containerised shipments, FCA is the correct term (because containers are delivered to the terminal, not loaded directly on the vessel by the shipper).
Note: the point at which risk transfers under FOB changed subtly between Incoterms 2010 and 2020 revisions to reflect modern port practice. Always confirm the exact port and terminal.
Who is responsible for what
- Cost
- Seller pays up to and including loading on the vessel; buyer pays main carriage.
- Risk
- Transfers when goods are on board the vessel at the loading port.
- Insurance
- Not obligatory.
- Duties
- Seller for export, buyer for import.
When to use
Bulk and break-bulk sea freight; not recommended for containers (use FCA).
Transport modes
sea only
FAQ
- Should I use FOB for container shipping?
- No. Containers are delivered to the terminal, not loaded by the shipper onto the vessel. FCA is the correct term for container shipments.
Create a FOB invoice
Start the wizard with FOB pre-selected. Takes about a minute.
Start with FOB