Incoterm
FOB Valencia, and when it is the wrong term
Free on Board belongs to the sea rules. Risk changes hands once the fruit is on board the vessel at the port of shipment, and the seller clears the goods for export. Asked for a truck running to Germany, the term has no event to point at, and both sides discover afterwards that they were describing different handovers.
The figures
| Incoterms 2020 group | Rules for sea and inland waterway transport |
|---|---|
| Delivery point | On board the vessel at the named port of shipment |
| Risk passes | Once the fruit is on board |
| Export formalities | Seller |
| Sea freight | Contracted by the buyer |
| ICC guidance for containers | Use Free Carrier instead |
What it changes on an order
Your citrus travels in reefer containers
A container leaves the shipper at a terminal gate and reaches the vessel days later. Under this term the seller has lost control of the box while the risk still sits with them, which is why the ICC points containerised trade at Free Carrier.
You are buying for road delivery in Europe
There is no vessel in that journey, so the delivery point described by the term never happens. A purchase order that says FOB and means delivered to my warehouse is a dispute waiting for something to go wrong on the road.
A documentary credit is behind the order
The reason for most misplaced sea terms is a bank asking for a shipped document. That requirement has its own answer inside Free Carrier since the 2020 edition, and using it keeps the handover where the cargo actually changes hands.
What this note does not settle
- Whether we would sell on shipment terms at all is unconfirmed. Port work, container bookings and vessel schedules are outside anything this site can promise today.
- The rule says nothing about the carriage contract. Cut-off times, the reefer setting, ventilation and free time at the terminal live in the booking, and a correct incoterm will not rescue a bad booking.
- Export formalities under this term are the seller's, and they are not the same as the import requirements of the receiving country. Those stay with the buyer and need checking before the fruit is picked, not after.
Source: ICC Incoterms 2020 rules
Three letters borrowed from the wrong journey
Misuse of this term starts with familiarity. A buyer has written FOB on purchase orders for years, the habit travels with an order for a truck heading north through France, and the contract now names a delivery event that will never happen. Nothing on that route puts fruit on board a vessel, so when a pallet arrives crushed both sides go looking for the moment risk passed and find the contract has not got one.
For road freight the fix is a delivered term with an address, or a handover term with an address. Either of them names a place that exists on the map of that journey. Changing it takes one line in the order, and it is the cheapest insurance in the entire file.
The days between the gate and the ship
Containerised citrus produces a quieter version of the same gap. The box is packed at the packhouse, handed in at the terminal and waits there for a vessel loading later in the week. Under this rule the seller keeps the risk through all of it while controlling none of it, and that mismatch is why the ICC steers container trade towards the handover rule instead.
Where the term stays anyway, the waiting needs answers of its own. Whether the container is plugged in on the terminal, who watches the temperature record, and how much free time the booking includes are questions for the carrier. Put them in the file beside the incoterm, because the incoterm answers none of them.
Talk to the grower
Tell us the variety, the sizes and the delivery week you need. You get a delivered price and what we can commit to in writing, from the person who picks the fruit.
The grower handles enquiries. Response times are still to be confirmed.