What is FOB (Free On Board)?

FOB, or Free On Board, means the seller delivers the goods on board the ship at the named Chinese port and handles export clearance. The buyer pays for ocean freight, insurance and everything after.

FOB is the most common term for sea shipments from China. The price covers the product, inland transport to the port, port charges and export customs.

Risk passes to the buyer once the goods are on board the vessel. A FOB quote always names the port, for example FOB Ningbo or FOB Shenzhen.

FOB is defined for sea and inland waterway transport. For air freight or courier, FCA is the matching term.

Related terms

IncotermsIncoterms are standard international trade terms, published by the International Chamber of Commerce, that define where the seller's responsibility for cost and risk ends and the buyer's begins.
CIF (Cost, Insurance and Freight)CIF means the seller pays the ocean freight and minimum insurance to bring the goods to the buyer's named destination port. The buyer handles import clearance, duties and delivery from the port.
EXW (Ex Works)EXW, or Ex Works, means the seller makes the goods available at their own premises and the buyer arranges and pays for everything from there: pickup, export clearance, freight, insurance and import.
Bill of lading (B/L)A bill of lading is the document issued by the ocean carrier that acts as a receipt for the cargo, the contract of carriage, and the document of title needed to collect the goods at destination.

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