Incoterms
FOB (Free On Board)
Sea-only Incoterm under which the seller delivers the goods on board the vessel the buyer has booked at the named port.
In four languages
FOB is the most common term in Chinese export trade, for example FOB Shanghai, FOB Ningbo or FOB Shenzhen. The seller pays to get the goods on board, including export clearance and origin terminal charges, and the buyer, through its own forwarder, books and pays the ocean freight and everything after. Risk passes when the goods are on board. Because it is a sea-only term, FOB should not be used for truck or rail freight. For containers there is a gap: the container is in the carrier's hands at the yard before loading, yet still at the seller's risk. Example: a Dubai importer buys FOB Nansha. The importer's forwarder books the space, the supplier delivers the container and clears export, and the forwarder manages the voyage, clearance and delivery in Dubai.
Questions
Who pays THC under FOB?
The seller pays origin charges up to loading on board, including origin THC. The buyer pays freight and destination charges.
Can FOB be used for trucks from China to Central Asia?
No. FOB is for sea and inland waterway only. Use FCA, CPT, CIP, DAP, DPU or DDP for road and rail.