Categories: Incoterms 2010

The expression Free On Board has arisen mainly for maritime transport and it establishes that the seller must bear all transport expenses until the port of shipment, including possible costs for setting the goods on board of the ship, as well as the costs for obtaining licences and documentation for the export from the country of origin and those for export customs operations.When the goods are considered ready for departure, all the other expenses are to be borne by the buyer, including the insurance costs. As far as the responsibility for the goods is concerned, this is transferred from the seller to the buyer at the moment in which the goods themselves physically cross the ship’s rail.The wording of this delivery term is considered complete with the indication of the port of shipment (example FOB Genoa). From this tem also the terms FOR – Free on Rail and FOT – Free on Truck were borrowed, although no longer correct, and are used respectively in case the transport takes place by rail or lorry.In case of transport by rail, road and air the equivalent term is Free Carrier (FCA).