Definition
FOB (Free On Board) is the sea/inland-waterway-only Incoterms® 2020 rule: the seller delivers when goods are on board the named vessel at the port of shipment, clears export, and risk passes to the buyer at that point.
FOB Manzanillo makes sense on a vessel; FOB Monterrey on a trailer does not.
What FOB is
The critical point is placing goods on board at the named port.
Buyer books ocean freight; insurance is not mandatory under FOB.
Why it matters (shipper / 3PL / carrier)
1.Shipper
As MX importer, FOB lets you choose the ocean line and negotiate freight/insurance; as exporter, your duty runs to on board + export.
2.3PL / NVOCC
Builds booking, on-board B/L, and match vs freight invoice; catches contracts that say FOB when the handoff was FCA at terminal.
3.Carrier / ocean line
The on-board B/L is the key proof; a trucker to the port does not “fulfill FOB” merely by arriving at the terminal.
Common Mexico–US mistakes
1.Road FOB
Wrong mode; use FCA/DAP/DDP.
2.Container at terminal
ICC practice points to FCA.
3.Unnamed port
Name the port of shipment (e.g. Manzanillo, Lázaro, Houston).
4.FOB Laredo on trailer
Road crossing is not a sea rule; switch to any-mode.
Checklist
Mode
Real vessel?
Port
Named shipment port.
B/L
On board.
Export
Seller.
OCL and the file
OCL does not issue B/Ls or choose the Incoterm. It helps match rule vs real mode, on-board B/L, and freight invoice before pay.
Sources and further reading
- Pillar: Incoterms® 2020.
- Siblings: CIF · FCA · B/L.
- ICC — Incoterms® 2020 (official publication; registered trademark). OCL educational paraphrase.
Key takeaways5 points
- FOB = on-board delivery at the port of shipment; sea / inland waterway only.
- Seller: export + on board; buyer: main ocean freight and import.
- Do not use FOB for border trucking or container-yard handoff (use FCA).
- Heavily searched for ocean imports into Mexico.
- ICC trademark — educational paraphrase.
Frequently asked questions
No. If bought, it is usually the buyer’s.
In both, risk typically passes on board at origin; under CIF the seller pays freight and minimum insurance.
Not as a sea rule. Use an any-mode Incoterm (FCA, DAP, DDP…).
If you hand off at the terminal/yard and not on board, FCA is usually correct; FOB requires goods on board the vessel.
The buyer (or their forwarder). The seller places goods on board and clears export.
ICC Incoterms® 2020. OCL educational paraphrase, not a legal opinion.