Part of the Comprehensive Incoterms Guide
FOB In Plain English
For FOB (Free On Board) shipping, the seller arranges all export country stages. The buyer arranges all other stages to the cargo’s ultimate destination. Not recommended for air freight or ocean LCL.
Where Is The Named Place For Handing Over Responsibility From The Seller To The Buyer?
The seller is responsible and liable for all the steps in their country, up until the goods are loaded onboard the ship or plane.
What Does The ICC Say?
Not recommended for containerized freight, however … (read next point!)
Is This A Good Choice?
Although the ICC did not intend that this incoterm be used for containerized freight, it is ideal and very popular for full container loads (FCL). However, it should not be used for ocean less than a container load (LCL) or air freight.
FOB Tips And Tricks
- FOB is not suitable for LCL or air freight, because there is a middle step for load consolidation. The named place of delivery is the consolidation facility, not the ship or plane. Consequently, the buyer will be liable and responsible for the remaining transportation and terminal charges. For LCL and air freight, consider FCA instead.