FOB – Free On Board (…named port of shipment): Free on Board means that the seller (exporter) delivers when the goods pass the ship’s rail at the named port of shipment. This means that the buyer (importer) has to bear all costs and risks of loss of or damage to the goods from that point.
The FOB term requires the seller (exporter) to clear the goods for export. If the parties do not intend to deliver the goods across the ship’s rail, the FCA term should be used.
This term can be used only for sea or inland waterway transport.