FOB — Free on Board (Incoterms 2020)
FOB — Free on Board (Incoterms® 2020). Risk transfers when the goods are on board the vessel nominated by the buyer at the named port of shipment.. Freight NOT included. Insurance NOT included.Generate compliant FOB documents in 60 seconds. Free up to 3/month.
infoFOB at a Glance
Responsibilities
- Risk Transfer
- When the goods are on board the vessel nominated by the buyer at the named port of shipment.
- Cost Responsibility
- Seller bears costs up to loading on board vessel. Buyer bears freight, import clearance, duties, inland transport.
- Transport Mode
- Sea/Inland Waterway ONLY
- Freight Included
- No — buyer arranges main carriage
- Insurance Included
- No — buyer arranges if desired
- Category
- Main Carriage Unpaid (F)
When to Use FOB
- For non-containerized sea freight
- When buyer wants control over ocean freight
- For bulk commodities loaded on vessel
When NOT to Use FOB
- For containerized cargo (use FCA instead)
- For air freight or multimodal transport (use FCA)
articleFOB Explained — Practical Guide
What FOB Means in Plain Language
FOB (Free on Board (Incoterms® 2020)) is an Incoterms® 2020 term in Category F — main carriage unpaid. Under FOB, the seller when the goods are on board the vessel nominated by the buyer at the named port of shipment.and does NOT pay for main carriage.
Step-by-Step: Who Does What
- Seller: Makes goods available at the named port/place.
- Export clearance: Seller arranges & pays for export clearance.
- Main carriage: Buyer contracts & pays carrier from named place.
- Risk transfers: When the goods are on board the vessel nominated by the buyer at the named port of shipment.. After this point, loss/damage is buyer's risk.
- Insurance: Buyer arranges own insurance if desired.
- Import clearance: Buyer arranges & pays for import clearance, duties, taxes at destination.
- Final delivery: Buyer unloads at destination.
Common FOB Mistakes to Avoid
- Using FOB for air/road/rail shipments — mode mismatch invalidates the term.
- Not naming the precise place/port — "FOB China" is invalid; use "FOB Shanghai" or "FOB Guangzhou".
- Assuming insurance is included when it's not — only CIP and CIF include seller-procured insurance.
- Confusing risk transfer with cost transfer — they happen at different points in C-terms.
- Missing "Incoterms® 2020" in contract — without edition, old 2010 rules may apply.
local_shippingCarrier Implementation Notes for FOB
local_shippingFedEx
- • Terms of Sale field: FOB + named place
- • Freight collect — buyer provides carrier account
- • Insurance: buyer's responsibility
- • Ocean AWB / Bill of Lading required
inventory_2UPS
- • Terms of Sale field: FOB + named place
- • Freight collect — buyer provides carrier account
- • Insurance: buyer's responsibility
- • Ocean AWB / Bill of Lading required
deployed_codeDHL
- • Terms of Sale field: FOB + named place
- • Freight collect — buyer provides carrier account
- • Insurance: buyer's responsibility
- • Ocean AWB / Bill of Lading required
downloadFree: Incoterms® 2020 Cheat Sheet (PDF)
One-page reference: all 11 terms, risk transfer points, cost matrix, when to use each. Perfect for your desk or forwarding team.
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