What is FOB?
FOB (Free on Board) is one of the most widely used shipping terms in international trade. The seller is responsible for delivering goods on board the vessel designated by the buyer at the named port of shipment. From that moment, the risk and cost shift to the buyer.
Evolution
- In 1812, a British court set the first precedent regarding FOB delivery.
- In 1919, the U.S. defined FOB Vessel (Named Port).
- In 1936, ICC officially included FOB in the Incoterms.
FOB in Incoterms 2010 vs. 2020
According to Incoterms 2010, delivery occurs once the goods are loaded onto the buyer’s designated vessel, and risk is transferred at that moment. The 2020 revision did not alter the FOB term.
Practical Considerations
- Who is listed as the Shipper on the bill of lading – buyer or seller?
- Who should receive the freight forwarder’s B/L first?
- Who bears the cost if cargo is abandoned at the destination port?
- If terms change to FOB Stowed or FIOST, when does the risk transfer?
FOB vs. FCA
| Factor | FOB | FCA |
| Mode of Transport | Sea/Inland waterway only | Any mode of transport |
| Risk Transfer | When goods are on board | When handed to the carrier |
| Documents | On-board bill of lading | Proof of delivery to carrier |
Global News Tie-In: Trump’s Student Ban Highlights Importance of Trade Clarity
In June 2025, U.S. President Trump issued an executive order restricting international students from entering Harvard University, sparking debate worldwide. This event underscores the importance of clarity and compliance in both education and international trade.
Much like FOB’s demand for seaworthy vessels, clear timelines, and proper proof of delivery, global business must operate on clarity and accountability to mitigate risks.
LVFUbattery: Applying FOB Principles in Global Trade
As a global energy brand, LVFUbattery consistently applies FOB terms in transactions with clients across Europe and Southeast Asia. We ensure each battery shipment meets risk-transfer, shipment proof, and insurance requirements to protect our partners’ interests.