FOB Incoterm (Free On Board) — Risk & Cost Split

FOB — Free On Board (Incoterms 2020) What FOB means. FOB stands for Free On Board. Risk passes when goods are on board; appropriate only for sea and inland waterway carriage, not containers handed over at a terminal. Risk and cost are separate questions. Incoterms allocate cost and risk independently, and the point where risk transfers is often not the point where the seller stops paying. Disputes usually arise from assuming the two move together, or from using a maritime term for containerised cargo handed over at a terminal rather than loaded across the ship's rail. Getting the term right. Frequently Asked Questions. Estimate landed cost under this term.

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