Incoterms® 2020 · F: main carriage unpaid

FOB Free On Board

The seller loads the goods on board the buyer's vessel at the named port. Risk passes once the goods are on board.

Delivery point: On board the vessel nominated by the buyer, at the named port of shipment
Risk passes: When the goods are on board the vessel
Transport mode: Sea and inland waterway only
Export clearance: Seller
Import clearance: Buyer
Insurance: Not required of either party

Responsibility matrix

Costs and risk, stage by stage

FOB is the most widely used rule in Asian exports. The seller clears the goods for export and loads them on board the ship the buyer has booked. Once the goods are on board, the risk passes to the buyer, who pays the ocean freight, insurance, destination charges and import clearance.

Seller pays
Buyer pays
Depends on the contract of carriage or the named place
Risk passes to the buyer

01 Loading at seller's premises Seller pays
02 Pre-carriage to export terminal Seller pays
03 Export clearance Seller pays
04 Origin terminal and loading on board Seller pays
05 Main carriage Buyer pays
06 Destination terminal charges Buyer pays
07 Import clearance, duties and taxes Buyer pays
08 Carriage to named destination Buyer pays
09 Unloading at destination Buyer pays

Who does what

The seller must

Deliver the goods on board the buyer's vessel at the named port, on the agreed date
Clear the goods for export and pay export fees
Pay origin terminal handling and loading costs
Provide the usual proof of delivery, such as the on-board bill of lading
Notify the buyer once the goods are on board

The buyer must

Book the vessel and tell the seller the ship, loading point and date
Pay the ocean freight and all costs after loading
Bear the risk once the goods are on board
Insure the goods if it wants cover
Clear the goods for import and pay duties and taxes

When to use it

Bulk and break-bulk cargo loaded directly on board
You have a freight contract or forwarder you trust
Your bank or customer expects FOB pricing

Be careful when

Container cargo: the seller hands the container over at the terminal days before loading, so FCA fits better
You assume the price includes destination charges: it does not

Tip for buying from Vietnam

Many Vietnamese suppliers quote FOB even for containers. It works in practice, but agree who pays origin terminal charges (THC) and write the exact port, for example FOB Cat Lai or FOB Hai Phong.

How to write it

FOB Hai Phong Port, Vietnam, Incoterms® 2020

Compare with

This guide summarises the Incoterms® 2020 rules in plain language for planning. It is not the official text. Incoterms® and the Incoterms® 2020 logo are trademarks of the International Chamber of Commerce. For the full rules, see ICC publication No. 723E.

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