FOB
Pronunciation: ef-oh-BEE
Also written as: FOB — Free On Board
An Incoterms trade term meaning 'Free On Board', specifying that the seller's responsibility ends once goods are loaded aboard the named vessel at the port of shipment.
Full Definition
Free On Board (FOB) is one of the most commonly used Incoterms codes in international sea freight. Under FOB, the seller bears all costs and risks up to and including loading the goods onto the vessel; from that point, the buyer assumes responsibility. FOB is always written in capitals and should be followed by the named port (e.g., FOB Shanghai). Editors should note that FOB has a different meaning in domestic North American trade (where it can mean the point at which title passes) versus its strict Incoterms 2020 definition. This distinction must be flagged in documents that cross both contexts.
Usage
Usage note: Always capitalise. Must be followed by the named port. Clarify in documents whether the Incoterms or domestic US UCC definition applies, as they differ significantly.
In Context
- "The purchase order was negotiated on FOB Singapore terms, with the buyer arranging ocean freight." — International purchase order
- "Editors working on US domestic logistics documents should note that 'FOB destination' and 'FOB origin' carry meanings distinct from the Incoterms definition." — Cross-border trade documentation note