Free On Board
FOB (named port of shipment) Incoterms 2010
- The seller delivers the goods to the buyer by loading them on board the vessel at the agreed port of loading within the agreed period.
- The seller pays the cost and bears the risks of damage to or loss of the goods until he has delivered them.
- The seller takes care of the export formalities.
- The buyer takes the delivery when the seller has loaded the goods on board the vessel at the port of loading.
- The buyer contracts for the carriage of goods from the named port of loading.
- The buyer pays the cost of the goods and bears the risk after the delivery.
- The buyer will take care of the import formalities and possible formalities in the country of transit, if any.
FOB CAN BE USED ONLY IN CASE OF TRANPORT BY SEA OR INLAND WATERWAYS, I.E. FROM PORT TO PORT
According to FOB the seller delivers the goods to the buyer at the port of loading. The seller delivers the goods to the buyer when he loads the goods on board the vessel named by the buyer at the agreed port of loading. The buyer takes the delivery when goods are loaded on board the vessel at the port of loading. Costs are divided and the risk is transferred between the seller and the buyer at the delivery.
The seller has not delivered the goods if he leaves them at the terminal or on the quay for later loading on board.
The seller will receive a document from the carrier as a proof of the delivery. If this document is a bill of lading, it should be an “on board” bill of lading.
The seller is responsible for the export formalities and their costs. The import formalities and possible formalities during transit are for the buyer.