Free On Board (FOB)
Definition: What is FOB?
FOB stands for “Free On Board.” It is an Incoterm used for sea or inland waterway transport. The seller is responsible for delivering the goods to the port of shipment and loading them onto the ship. The risk transfers to the buyer once the goods are on board the ship.
Seller’s responsibilities under FOB:
- Deliver goods to the port of shipment
- Pay for transportation to the port and loading costs
- Handle export customs clearance
- Package goods appropriately for ocean transport and direct vessel loading
Buyer’s responsibilities under FOB:
- Bear the risk once the goods are on board the ship
- Pay for sea freight, insurance, and all costs from the port onward
- Handle import customs clearance and delivery to the final destination
- Arrange comprehensive insurance coverage from the point goods are loaded on board
When to use FOB
FOB is ideal for buyers who want to take control of their shipping costs and logistics once the goods are loaded onto the ship. FOB should only be used for bulk cargo or non-containerized goods where the seller has direct access to the vessel for loading. It is typically used for sea transport but can also apply to inland waterways.
Important considerations for FOB:
- FOB is only suitable for bulk cargo, oil, grain, or non-containerized goods
- For containerized shipments, use FCA (Free Carrier) instead
- Seller must have direct access to the vessel for proper loading
- Insurance arrangements should be clearly defined in the contract
- Risk transfers when goods are physically loaded on board, not at terminal delivery
How time:matters supports FOB shipments
With time:matters, even after the goods are handed over to the carrier at the port, you can count on fast, real-time tracking and seamless intervention in case of any delays. Our express network ensures that every step from the port onward is as smooth as possible.