FOB is a suitable Incoterms® rule for transport of bulk and general cargo by water. The seller delivers the goods on board the vessel at the agreed port of departure.
Seller arranges and pays for:
- Transport up to and including loading on board a vessel, named by the buyer, at the agreed port of departure.
- Export formalities and export documents.
Buyer arranges and pays for:
- Transport from the departing ship to final location.
- Import formalities and local import documents.
Suitable for:
- Trade within and outside the EU.
- Transport of bulk and general cargo by ship.
Not or less suitable for:
- Container transport, as the containers cannot be checked at the moment of risk transfer.
- Payment by Letter of Credit or documentary collection, because the buyer receives the Bill of Lading as the shipping company’s contracting party.
- Transport by air, road, or rail.
Transfer of risk from seller to buyer:
- Once seller delivers goods on board vessel, named by the buyer, at the agreed port of departure.
Points of attention:
- Only intended for transport by water.