FOB
Free On Board
Under FOB (Incoterms® 2020), the seller clears the goods for export and loads them on board the ship chosen by the buyer, at the named port of shipment. The risk passes to the buyer when the goods are on board.
In plain words
FOB is only for sea and inland waterway transport. The seller pays all costs until the goods are on board, usually including the origin THC. The buyer books the ship, pays the ocean freight, and pays the costs at destination, including import duties.
FOB is very well known, but it is not ideal for containers. With containers, the seller usually hands the goods over at the terminal days before loading, yet still carries the risk until they are on the ship. The ICC suggests FCA for container cargo. Always write the port, for example “FOB Mersin, Incoterms® 2020”.
Example from real shipping
A buyer in Spain buys marble blocks “FOB Izmir, Incoterms® 2020” as break-bulk cargo. The seller trucks the blocks to the port, clears export, and pays for loading them onto the ship. Once the blocks are on board, the buyer has the risk and pays the sea freight to Valencia.
Related terms
- FCAUnder FCA (Incoterms® 2020), the seller clears the goods for export and hands them over to the carrier chosen by the buyer, at a named place. From there, the buyer pays the transport and takes the risk.
- CFRUnder CFR (Incoterms® 2020), the seller pays the sea freight to the named port of destination. But the risk passes to the buyer earlier, when the goods are loaded on the ship at the port of shipment.
- THCTHC is a charge for handling a container at the port terminal, for example lifting it on or off the ship and moving it in the yard.
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Request a QuoteThis glossary is general information, not legal or customs advice. Rules, fees, and practice can differ by carrier, port, and country.