Freight Glossary
FOB (Free On Board) – Meaning & Examples
Incoterm where the seller delivers goods on board the vessel, risk transfers at that point.
- Abbreviation
- FOB
- Full term
- Free On Board
- Related terms
- FOB, FOB shipping, FOB terms
Free On Board (FOB) is one of the most commonly used Incoterms for sea freight. Under FOB, the seller is responsible for delivering goods onto the vessel at the named port of shipment. Risk and cost transfer to the buyer once the goods are on board. The buyer arranges and pays for ocean freight, insurance, and destination costs. FOB is only used for sea and inland waterway transport.
Free On Board examples
- FOB Shanghai means the seller delivers goods on the vessel in Shanghai; the buyer pays ocean freight onwards.
How FOB is used in freight operations
FOB appears in quotations, bookings, shipping documents, and tracking updates. Confirm how it applies to your shipment with your carrier, forwarder, or customs representative, because practice can differ by country and contract.
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Frequently asked questions
What is FOB?
Incoterm where the seller delivers goods on board the vessel, risk transfers at that point.
What does FOB stand for?
FOB stands for Free On Board.
What is an example of FOB?
FOB Shanghai means the seller delivers goods on the vessel in Shanghai; the buyer pays ocean freight onwards.