# FOB, Free On Board (Incoterms 2020)

FOB (Free On Board) means the seller clears the goods for export and loads them on board the vessel nominated by the buyer at the named port of shipment; risk passes once the goods are on board, and the buyer pays the sea freight and insurance. It is for sea and inland waterway only.

- Transport: sea and inland waterway only
- Delivery and risk transfer: On board the vessel nominated by the buyer at the named port of shipment.
- Seller's costs run to: On board vessel

## Responsibilities

| Job | Who |
|---|---|
| Export clearance | Seller |
| Loading at origin | Seller |
| Main carriage | Buyer |
| Insurance | No obligation |
| Unloading at destination | Buyer |
| Import clearance and duties | Buyer |

## Common mistakes

- **FOB for containers** Containers are handed to the carrier at the terminal, often days before loading. Under FOB the seller still carries the risk until the box is on board, without any control over it. The ICC recommends FCA for containerised goods.
- **FOB is not the US 'FOB destination'** Domestic US contracts use FOB under the Uniform Commercial Code with a different meaning. In international trade, write 'FOB [port] Incoterms® 2020'.
- **Who pays origin terminal charges** Port and terminal charges at origin are argued over constantly. Agree in the contract which ones are in the FOB price.

## FOB or FCA?

FCA hands over at the carrier or terminal instead of on board, which matches container shipping.

Incoterms® is a trademark of the International Chamber of Commerce; CartonMath is not affiliated with the ICC.

## FAQ

**What does FOB mean?**
FOB (Free On Board) means the seller clears the goods for export and loads them on board the vessel nominated by the buyer at the named port of shipment; risk passes once the goods are on board, and the buyer pays the sea freight and insurance. It is for sea and inland waterway only.

**When does risk pass under FOB?**
On board the vessel nominated by the buyer at the named port of shipment.

**Who pays the main freight under FOB?**
The buyer arranges and pays the main carriage.

**Who pays import duties under FOB?**
The buyer clears the goods for import and pays any duties and taxes under FOB.

**Can FOB be used for container shipments?**
FOB is a sea and inland waterway rule. For containers, the ICC recommends FCA instead, because containers are handed over at a terminal before loading.

Source page: https://cartonmath.com/incoterms/fob/
Updated: 2026-10-06
Publisher: CartonMath (https://cartonmath.com)