FOB
Free on Board — the seller delivers goods on board the vessel at the named origin port; the buyer pays freight and insurance from there.
Trade termTL;DR: This term is one of 37 definitions in the freight glossary, so the signal is the number it changes — not the acronym. It sits in the Trade term category and links to 3 related terms for adjacent freight math. Use the example below to turn the definition into a before/after calculation before you quote or clear cargo.
What it means
FOB (Free on Board) is one of the most-used Incoterms in China export. Under FOB the seller’s obligation ends the moment the goods cross the ship’s rail at the named origin port — the seller handles export clearance and inland transport to the port, while the buyer arranges and pays the ocean freight, insurance and everything after loading. On the China-to-GCC corridor FOB is the default for many experienced importers because it gives the buyer control over the carrier and the freight rate. The catch is that the buyer also owns the risk the moment the goods are on board: if the container is lost, damaged or delayed at sea, that is the buyer’s problem, not the seller’s. FOB is a buyer-control term — you win by negotiating your own freight, but you carry the ocean risk.
Who pays / who bears risk
Who pays
Buyer pays freight and insurance from the moment the goods are on board.
Who bears risk
Risk transfers to the buyer once goods are loaded on the vessel.
Common misunderstanding
FOB does not mean the seller manages the shipment to the destination port.
Why it matters
FOB lets you control the carrier and freight cost, but transfers ocean risk to you at the origin port — the most common term for China-to-GCC buyers who have their own forwarder.
Example
A Dammam importer buys FOB Shanghai: the Chinese seller clears export and loads the container; the Saudi buyer pays the ocean freight to Dammam and owns the goods from the moment they are on board.
Related terms
CIF
Cost, Insurance and Freight — the seller pays freight and insurance to the named destination port; risk transfers to the buyer once loaded at origin.
Learn more →EXW
Ex Works — the seller makes goods available at their premises; the buyer bears all transport, export clearance and risk from the factory gate.
Learn more →Incoterms
International Commercial Terms — a standardized set of trade terms defining buyer and seller responsibilities, published by the ICC.
Learn more →