FOB — Free On Board
The seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment, cleared for export. The buyer pays the sea freight.
- Transport
- Sea only
- Main carriage
- The buyer books and pays the sea freight.
- Risk passes
- When the goods are on board the vessel at the port of shipment.
- Insurance
- Not required
Who pays and who carries the risk
- Export clearanceSeller
- Loading at sellerSeller
- Transport to terminalSeller
- Origin terminal & loadingSeller
- Risk passes to buyerMain carriageBuyer
- Destination terminal & unloadingBuyer
- Import clearance & dutiesBuyer
- Delivery to buyerBuyer
- Unloading at buyerBuyer
Seller
- Clear the goods for export
- Deliver and load the goods on board the nominated vessel
- Pay costs up to loading, including origin port charges
- Provide proof of delivery (usually the bill of lading)
Buyer
- Nominate the vessel and pay sea freight
- Bear risk once the goods are on board
- Insure the cargo if it wants cover
- Clear the goods for import and pay duties
When to use it
Bulk and breakbulk cargo loaded directly onto the ship, when the buyer controls the sea freight.
Watch out
Widely used for containers, but strictly it does not fit them: the box is handed to the terminal days before loading, while the seller still carries the risk. For containers, FCA at the terminal is the correct rule.
Not sure which term to agree?
Tell us the route and the cargo — we'll suggest the term that fits and quote the freight for it.
Get a quoteOther Incoterms® rules
Incoterms® is a registered trademark of the International Chamber of Commerce. This guide is Cargo 4S's own summary for everyday use; for the complete rules see the official ICC Incoterms® 2020 publication.
Ready to
your ocean freight?
Join companies using Cargo 4S to manage international logistics through one connected platform and dedicated logistics experts.