# FOB (Free On Board)

*Last updated: 2026-06-26*

> FOB (Free on Board) allocates transport risk and cost to the buyer from the moment goods are delivered on board the vessel at the named port of shipment.

FOB (Free on Board) allocates transport risk and cost to the buyer from the moment goods are delivered on board the vessel at the named port of shipment. Up to that point, the seller covers all charges, including inland transport and export customs clearance. Once loaded, the buyer assumes ocean freight, marine insurance, and all subsequent risks. FOB applies exclusively to sea and inland waterway transport and is particularly common in bulk commodity and raw material trade. Unlike CIF or CFR, the seller under FOB bears no freight or insurance costs beyond the point of loading, which typically results in a lower quoted price. Under current Incoterms, the old concept of the "ship's rail" has been replaced by the actual delivery on board the vessel.

**Source:** [https://iccwbo.org/business-solutions/incoterms-rules/](https://iccwbo.org/business-solutions/incoterms-rules/)

## Quick Facts

| Property | Value |
|---|---|
| Term | FOB (Free On Board) |
| Language | EN |
| Word count | 125 |
| Last updated | 2026-06-26 |
| Source | https://iccwbo.org/business-solutions/incoterms-rules/ |

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