Incoterms 2020
FOB
Free On Board
Sea & inland waterwayThe seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment, cleared for export. Risk passes once the goods are on board.
Written as: FOB [named port of shipment]
FOB
Free On Board
Seller delivers on board the vessel
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SellerBuyer
Risk
Hover a stage to see who is responsible.
SellerBuyerRisk
| Stage | Who pays | Who's at risk |
|---|---|---|
| Export packaging | Seller | Seller |
| Loading at origin | Seller | Seller |
| Inland to origin port | Seller | Seller |
| Export customs | Seller | Seller |
| Origin terminal charges | Seller | Seller |
| Loading on main carrier | Seller | Seller |
| Main carriage (freight) | Buyer | Buyer |
| Destination terminal charges | Buyer | Buyer |
| Import customs & duty | Buyer | Buyer |
| Inland to destination | Buyer | Buyer |
| Unloading at destination | Buyer | Buyer |
Seller's responsibilities
- Clear for export and load on board the vessel
Buyer's responsibilities
- Pay the main carriage and import costs
- Bear risk from on board the vessel
Risk transfer
Under FOB, the risk of loss or damage passes from the seller to the buyer at Main carriage (freight).
Insurance
Not required (buyer may arrange)
When to use it
A long-standing choice for bulk and non-containerised sea freight where the seller can load the vessel.
Watch out
Widely misused for containers. If goods are containerised, use FCA instead — risk should pass at the terminal, not the ship’s rail.
Frequently asked
- When does risk transfer under FOB?
- When the goods are placed on board the vessel at the port of shipment. Before that, risk is on the seller.