FOB (Free On Board)
Free On Board means the seller delivers the goods on board the vessel nominated by the buyer at the port of shipment; risk passes once the goods are on board. The seller clears export and pays costs up to loading, while the buyer pays ocean freight and insurance. FOB is very common in Indonesian export quotes. For containers the ICC recommends FCA, because the box is handed over at the terminal days before loading, and who pays the THC must be agreed clearly.
Related terms
- CFR (Cost and Freight)
Cost and Freight means the seller contracts and pays ocean freight to the destination port, but risk has already passed to the buyer once the goods are loaded on board at origin.
- CIF (Cost, Insurance and Freight)
CIF works like CFR, but the seller must also take out cargo insurance for the buyer, at least at Institute Cargo Clauses (C) level and for at least 110% of the contract value.
- FCA (Free Carrier)
Free Carrier means the seller hands export-cleared goods to the carrier nominated by the buyer at an agreed place.
- Port of Loading (POL)
The port of loading (POL) is the port where cargo is loaded onto the main ocean vessel named on the B/L, for example Tanjung Priok (IDTPP) or Tanjung Perak (IDSUB).
- Terminal Handling Charge (THC)
The THC is the charge for handling a container at the terminal, such as lifting it on or off the vessel and moving it within the yard, usually billed by the shipping line to the s…
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