Also called: Free on Board
On-board delivery at the load port
Under Incoterms 2020, FOB is not a generic “seller gets it to the port” phrase. Delivery is fulfilled when the goods are on board at the named port of shipment. Export clearance is generally the seller’s job under the rule; import clearance is the buyer’s. Main carriage is the buyer’s contract because the buyer nominates the vessel.
When buyers choose FOB
FOB is often used where the buyer already has freight contracts or wants to control the vessel and the ocean routing. Compare FOB offers only at the same load port. A FOB number is not comparable with a CIF number at destination until freight and insurance are added on the same basis.
FOB and containerised cargo (FCA)
ICC’s Incoterms 2020 FOB rule is for sea or inland waterway transport where the parties intend delivery on board a vessel. ICC states that FOB is not appropriate where goods are handed to a carrier before they are on board, for example at a container terminal. In that pattern parties should consider FCA rather than FOB.
This page does not replace the official ICC rules. For the FOB versus FCA comparison, see ICC Academy, “Incoterms 2020: FCA or FOB?” (https://academy.iccwbo.org/incoterms/article/incoterms-2020-fca-or-fob/) and the Incoterms 2020 FOB guidance published by ICC. TTC does not issue Incoterms rules.
If an RFQ is for bagged or bulk cargo loaded over the ship’s rail at a named port, FOB may still be the term the parties can perform. If the seller only delivers a container to a terminal, write FCA with a named place instead of hoping FOB will match the handover.
Cost and risk split under FOB
Seller: goods, export formalities, delivery on board, and the documents the rule and the contract require at that point. Buyer: vessel, freight, insurance unless separately agreed, import formalities, and risk after on-board delivery. Unlike CFR or CIF, the seller does not contract the main carriage.
What FOB does not settle
FOB does not say when you pay. It does not transfer title by itself. It does not require the seller to insure the ocean voyage. It does not name the discharge port; that is the buyer’s routing problem once the goods are on board.
How to write FOB in an RFQ
“FOB Bandar Abbas, Incoterms 2020” tells the seller where on-board delivery happens. “FOB Iran” does not. Two FOB quotes at different load ports are still not the same cost to the buyer, because inland and port charges before loading differ.
FOB-specific mistakes
Using FOB for trucks or air. Writing FOB when the seller only delivers to a container yard. Comparing FOB and CIF prices without adding freight and insurance. Forgetting that a letter of credit may still want an on-board bill of lading, which is a document issue to write into the contract, not something FOB invents on its own.
TTC uses these terms in its RFQ and transaction process. Nothing on this page is a licence, a certification, a guarantee of clearance, or a substitute for the documents and clauses of a specific contract.