Glossary term
FOB
Incoterms rule: the seller delivers goods on board the vessel at the named port; risk passes on board.
Free On Board. The seller clears the goods for export and delivers them on board the vessel at the named port of shipment. Risk passes when the goods are on board.
FOB is the most used and most misused rule in trade. It is written for sea and inland waterway transport, and specifically for cargo the seller can put on board - which containers are not. A container is handed to a terminal days before loading, leaving the seller bearing risk for a period it does not control. FCA is the correct rule for containerised shipments.
The term is also used loosely in domestic US trade with a meaning unrelated to the Incoterms rule, which is worth confirming in any contract that uses it.