Incoterms
FOB: Free on Board
Named Place
Requirement: Port of Shipment
Under the terms
of FOB (short for “Free on Board”), the seller clears the goods for export and
ensures they are delivered to and loaded onto the vessel for transport at the
named port of departure.
The buyer takes
over risk and costs, including import clearance and duties, as soon as the
goods are loaded onto the transport vessel at the port of departure.
FOB only applies
to ocean or inland waterway transport. As such, the named place is always a port.
It does not apply if the main carriage is via air, ground or rail.
This term is
commonly used for bulk cargo (such as oil or grain) or freight from Asia.
FOB
Incoterm Obligations
Seller’s Obligations
o Goods,
commercial invoice and documentation
o Export
packaging and marking
o Export
licenses and customs formalities
o Pre-carriage
and delivery
o Loading
charges
o Delivery
onboard vessel at named port of shipment
o Proof
of delivery
o Cost
of pre-shipment inspection
Buyer’s Obligations
o Payment
for goods as specified in sales contract
o Main
carriage
o Discharge
and onward carriage
o Import
formalities and duties
o Cost
of pre-shipment inspection (for import clearance
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