Incoterms® 2020Modes: Sea, Inland Waterway
FOB - Free On Board
FOB (Free On Board) is one of the 11 rules published by the ICC in Incoterms® 2020. Risk passes on board vessel at named port of loading. Insurance is not an obligation under FOB - the buyer decides.
Good for LC
Risk transfer point
On board vessel at named port of loading
Who does what under FOB
| Obligation | Party |
|---|---|
| Export Packaging | Seller |
| Inland Transport (Origin) | Seller |
| Export Clearance | Seller |
| Loading on Vessel | Seller |
| Main Carriage (Freight) | Buyer |
| Insurance | Buyer |
| Destination Charges | Buyer |
| Import Clearance | Buyer |
| Import Duty | Buyer |
Watch outs
- Do NOT use for containerised cargo - risk transfers at ship's rail; use FCA.
- LC must not require insurance certificate from seller - buyer insures under FOB.
Under a letter of credit
Seller gets B/L. Field 47A must not require insurance certificate.