Watch: What Does FOB Mean in Shipping?
Watch this short video to understand how costs, responsibilities and risk are divided between the seller and buyer under the FOB Incoterm.
Quick Overview
FOB stands for Free on Board. It is an Incoterm used for goods transported by sea or inland waterway.
Under FOB, the seller delivers the goods on board the vessel at the named port of shipment. Risk transfers from the seller to the buyer when the goods are on board.
Video Transcript
“What does FOB mean in international shipping?
FOB, or Free on Board, is an Incoterm used for sea and inland waterway transport.
Under FOB:
The seller prepares the goods and completes export clearance.
The seller delivers the cargo on board the vessel at the named origin port.
Risk transfers to the buyer once the goods are on board.
The buyer arranges the main freight, import clearance and onward transportation.
FOB is generally intended for bulk and breakbulk cargo. For containerized shipments delivered to a terminal before vessel loading, FCA may provide a clearer transfer point.
Always specify the named origin port and confirm each party’s costs, risks and responsibilities in the sales contract.”
Learn More About FOB
This video provides a brief overview. For a detailed explanation of FOB costs, obligations, risk transfer, insurance and the difference between FOB and FCA, read the complete FOB Incoterm guide.
You can also explore all Incoterms to compare the responsibilities assigned to buyers and sellers under different trade terms.
