Incoterms® - FOB

Free On Board (named port of shipment)

Applies to:       Sea and inland waterway  Sea and inland waterway only

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Free on Board requires the seller to clear the goods for export and deliver them loaded on board the vessel at the named port of departure.

The seller takes over risk and costs starting from the time the goods have been loaded. In addition, the seller is responsible for import clearance and duties.

Under the rules, FOB is only used for ocean or inland waterway transport. The named place is always a port. It does not apply if the main carriage is via ground or rail.

The term is commonly used for bulk cargo (such as oil or grain) or freight coming out of Asia.

   Seller pays all costs up to the main carriage, buyer pays all costs starting with the main carriage.


Seller’s Obligations

  • Goods, commercial invoice and documentation
  • Export packaging and marking
  • Export licenses and customs formalities
  • Pre-carriage and delivery
  • Loading charges
  • Delivery onboard vessel at named port of shipment
  • Proof of delivery

Buyer’s Obligations

  • Main carriage
  • Discharge and onward carriage
  • Import formalities and duties
  • Cost of pre-shipment inspection

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