INCOTERMS 2010: ICC OFFICIAL RULES FOR THE INTERPRETATION OF TRADE TERMS

FOB – Free On Board (named port of loading)

Under FOB terms the seller bears all costs and risks up to the point the goods are loaded on board the vessel. The seller’s responsibility does not end at that point unless the goods are “appropriated to the contract” that is, they are “clearly set aside or otherwise identified as the contract goods. Therefore, FOB contract requires a seller to deliver goods on board a vessel that is to be designated by the buyer in a manner customary at the particular port. In this case, the seller must also arrange for export clearance. On the other hand, the buyer pays cost of marine freight transportation, bill of lading fees, insurance, unloading and transportation cost from the arrival port to destination. Since Incoterms 1980 introduced the Incoterm FCA, FOB should only be used for non-containerized seafreight and inland waterway transport. However, FOB is commonly used incorrectly for all modes of transport despite the contractual risks that this can introduce. In some common law countries such as the United States of America, FOB is not only connected with the carriage of goods by sea but also used for inland carriage aboard any “vessel, car or other vehicle.

Who covers the logistics charges?

Distribution of costs according to the Incoterm negotiated in the contract. Classification according to the increased level of obligations for the seller

distribution-CPT

Incoterms 2010

  • CFR — Cost and Freight
  • CIF — Cost, Insurance and Freight
  • CIP — Carriage and Insurance Paid Тo
  • CPT — Carriage Paid To
  • DAP — Delivered at Place
  • DDP — Delivered Duty Paid
  • DAT — Delivered at Terminal
  • EXW — EX Works
  • FAS — Free Alongside Ship
  • FCA — Free Carrier
  • FOB — Free On Board
  • incoterms 2010 mini logo

Incoterms 2000

  • DDU — Delivered Duty Unpaid
  • DES — Delivered Ex Ship
  • DEQ — Delivered Ex Quay
  • DAF — Delivered At Frontier

Blog

What costs are included in freight?

Freight costs typically include several different components, depending on the mode of transport and the specific terms of the shipment. Some of the common costs included in freight are: Transportation costs: This is the cost of actually moving the goods from the point of origin to the destination. Transportation costs may be charged based on […]

What are the 4 types of air freight?

There are four main types of air freight: General cargo: This is the most common type of air freight and includes a wide range of goods that are transported by air, such as electronics, textiles, machinery, and consumer goods. General cargo can be shipped in a variety of packaging, including boxes, crates, and pallets. Express […]

How many types of sea freight?

There are several types of sea freight that are commonly used for transporting goods by sea. These include: Full container load (FCL): In FCL shipping, the entire container is reserved for one shipment, which can be loaded and unloaded at the origin and destination ports. This is typically the most cost-effective option for shippers with […]

See all our news