Incoterms 2020
FOB (Free On Board)
An Incoterm under which the seller delivers goods on board the vessel at the named port, after which risk passes to the buyer.FOB applies only to sea and inland waterway transport. The seller clears the goods for export and loads them on the ship; from that moment the buyer bears the cost and risk of main carriage, insurance and import. FOB is one of the most widely quoted terms in ocean trade.
Frequently asked questions
- When does risk transfer under FOB?
- Risk passes from seller to buyer once the goods are placed on board the vessel at the named port of shipment.
- Can FOB be used for air or road freight?
- No — FOB is a sea-and-inland-waterway term; for other modes FCA is the correct equivalent.