GlossaryEN1 min readUpdated: Jun 26, 2026
Free On Board
Free On Board (FOB) is an Incoterm issued by the ICC, applicable exclusively to sea and inland waterway transport, under which risk passes from seller to buyer once the goods are loaded on board the nominated vessel at the named port of shipment.
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Source: https://iccwbo.org/business-solutions/incoterms-rules/
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Incoterms 2020 Simulator: Who bears costs & risk?
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Definition & Explanation
Free On Board (FOB) is an Incoterm issued by the ICC, applicable exclusively to sea and inland waterway transport, under which risk passes from seller to buyer once the goods are loaded on board the nominated vessel at the named port of shipment. From that point, the buyer bears all costs – ocean freight, insurance, and discharge charges. The seller handles export clearance and all costs up to loading. FOB is not appropriate for containerised cargo: Incoterms 2020 recommend FCA instead, since containers are typically handed over to the carrier at an inland terminal before the vessel is reached. In practice, FOB remains widely used for bulk commodities, raw materials, and break-bulk shipments.
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⚖️ ICC Incoterms 2020
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