Definition
The seller delivers, cleared for export, once the goods are on board the vessel at the named port.
FOB places cost and risk on the seller up to the moment the cargo is loaded on board the ship at the agreed port of loading; from there the buyer carries the freight, insurance, and import. It is one of the most widely used terms in ocean trade.
FOB is meant only for sea and inland-waterway transport of non-containerized or bulk cargo. For containers handed over at a terminal before vessel loading, FCA is technically correct, though FOB remains common in practice.
Related terms
FCA (Free Carrier)
The seller delivers, cleared for export, to a carrier nominated by the buyer at a named place.
CFR (Cost and Freight)
The seller pays ocean freight to the destination port, but risk passes to the buyer once goods are on board.
CIF (Cost, Insurance and Freight)
The seller pays freight and minimum marine insurance to the destination port; risk still passes on loading.
Port of Loading (POL)
The port where cargo is loaded onto the vessel for the main ocean leg of its journey.
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