Free On Board
The seller loads the goods on board the vessel at the named port. Risk passes once they are on board. A classic sea term for bulk and non-containerised cargo.
When to use it
FOB is the classic sea-freight rule for bulk and non-containerised cargo, and it remains the most commonly used term in practice even where ICC recommends FCA instead. Use it when the buyer arranges the main ocean freight and insurance, and risk transfer at the vessel's rail is unambiguous for your cargo type.
The common mistake
Applying FOB to containerised cargo. The risk-transfer point (on board the vessel) does not match how containers actually move, since they are handed to the carrier at a terminal well before loading; FCA transfers risk at a point that actually reflects the container's journey.
Risk transfers
after Loading onto main carriage, from seller to buyer.
See the full responsibility matrix
Compare all 11 Incoterms 2020 rules side by side, interactively.
Incoterms is a registered trademark of the International Chamber of Commerce (ICC). This is an educational summary, not the official rules. For the binding text, see the ICC Incoterms 2020 publication.
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