Free On Board
FOBThe seller delivers export-cleared goods on board the buyer's nominated vessel at the port of shipment.
Last reviewed: 30 September 2026
Professional definition
The seller delivers export-cleared goods on board the buyer's nominated vessel at the port of shipment. The named place must be stated precisely and the parties should identify the Incoterms® 2020 version.
Example
A steel exporter loads coils on the buyer's vessel at Port Talbot; risk passes once aboard.
Where it is used
Sea / inland waterway only. Name the port of shipment. FCA is generally more suitable for container cargo handed to a terminal before loading.
FOB responsibilities
Seller
- Clear goods for export
- Deliver and load goods on board the nominated vessel
- Provide on-board delivery evidence
Buyer
- Nominate vessel and pay ocean freight
- Bear risk once goods are on board
- Arrange insurance and import clearance
- Delivery point
- Name the port of shipment. FCA is generally more suitable for container cargo handed to a terminal before loading.
- Risk transfer
- Transfers when goods are on board the vessel at the named port of shipment.
- Cost responsibilities
- Seller pays through loading aboard and export clearance. Buyer pays ocean freight, destination and import costs.
- Insurance
- Neither party must insure; buyer normally insures from on-board delivery.
- Customs
- Export: Seller. Import: Buyer. Seller pays export duties/taxes; buyer pays import duty, import VAT and clearance charges.
Common mistakes and things to remember
Incoterms® allocate delivery, risk, cost and customs tasks; they do not determine title, payment, product compliance or every contract obligation.
Source
Use the linked authority and applicable national guidance for current requirements.