With the Incoterm FOB, the selling party must ensure that the goods are loaded on board the ship. The risk therefore passes when the goods are on board the ship. This Incoterm is frequently used and we regularly see it with sea freight from China, for example. The seller in China ensures that the clearance is arranged, the local costs are paid and the goods are delivered at the terminal in China. The risk only passes to the buyer when the goods are on board the ship. This Incoterm is also only valid for transport by water.