FAR 52.247-37—F.o.b. Vessel, Port of Shipment.
Plain-English Summary
FAR 52.247-37 sets the rules for a shipment term where the Government buys goods on an "f.o.b. vessel, port of shipment" basis. This clause explains what that term means, how the contractor must pack and mark the shipment, how the contractor must deliver the goods onto the ocean vessel, who pays the costs of getting the goods actually loaded, what shipping document must be provided, who bears the risk of loss or damage before loading, and when the contractor must help obtain export or import documents. In practice, the clause shifts the contractor’s responsibility to getting the goods safely and properly loaded at the named port, while the Government takes responsibility only after the shipment is on board. It is especially important in international ocean shipments because loading, documentation, carrier requirements, and export/import paperwork can affect cost, timing, and liability. The clause also ties directly to the contract’s delivery term, so both parties must understand exactly when delivery occurs and when risk transfers.
Key Rules
FOB Vessel Defined
"F.o.b. vessel, port of shipment" means the Government pays only for goods loaded, stowed, and trimmed on board the ocean vessel at the specified port. Delivery is not complete until the shipment is actually on the vessel at that port.
Proper Packing and Marking
The contractor must pack and mark the shipment to meet contract specifications. If the contract does not give packing instructions, the contractor must prepare the shipment for ocean transport according to carrier requirements and in a way that protects the goods and supports the lowest applicable transportation charge.
Delivery and Loading Costs
The contractor must deliver the shipment on board the ocean vessel in good order and condition within the required date or period. The contractor also must pay all charges incurred in placing the shipment actually on board, including loading-related costs.
Shipping Receipt Required
The contractor must provide a clean ship’s receipt or an on-board ocean bill of lading. This document serves as proof that the goods were loaded on the vessel and helps establish that delivery under the clause has occurred.
Risk Before Loading
The contractor is responsible for any loss of or damage to the goods before they are delivered on board the ocean vessel. Risk transfers only after the shipment is on board as required by the clause.
Export and Import Assistance
At the Government’s request and expense, the contractor must assist in obtaining documents needed for exportation or importation at destination. This is a support obligation, but the Government bears the cost of that assistance.
Responsibilities
Contracting Officer
Use this clause when the contract delivery term is f.o.b. vessel, port of shipment, and ensure the solicitation and contract clearly identify the port of shipment and any applicable packing, marking, and delivery requirements. The contracting officer should also make sure the parties understand when delivery occurs and what documents are required.
Contractor
Pack and mark the shipment properly, prepare it for ocean transport if no specifications are provided, deliver the goods on board the named ocean vessel on time, pay loading-related charges, provide the required clean ship’s receipt or on-board bill of lading, bear the risk of loss or damage before loading, and assist with export/import documents when requested by the Government and at the Government’s expense.
Government
Accept the shipment once it is properly loaded on board the ocean vessel at the specified port, and pay for any requested assistance in obtaining export or import documents. The Government also bears the transportation risk only after delivery occurs under the clause.
Practical Implications
This clause makes the loading point at the port of shipment the critical delivery milestone, so contractors should coordinate closely with carriers, terminal operators, and freight forwarders to avoid missed sailings or disputes over when delivery occurred.
Packing and marking errors can create extra cost, delay loading, or cause the shipment to be rejected by the carrier, so contractors should follow contract instructions first and carrier requirements second when the contract is silent.
The contractor bears pre-loading risk, so damage in transit to the port, at the terminal, or during loading can remain the contractor’s problem unless the contract says otherwise.
The required clean ship’s receipt or on-board bill of lading is important evidence of delivery; missing or incorrect documents can create payment, acceptance, or claims issues.
Requests for export or import paperwork assistance should be handled carefully because the contractor must help, but only at the Government’s request and expense, so the parties should document the request and cost responsibility clearly.
Official Regulatory Text
As prescribed in 47.303-9 (c) , insert the following clause in solicitations and contracts when the delivery term is f.o.b. vessel, port of shipment: F.o.b. Vessel, Port of Shipment (Apr 1984) (a) The term "f.o.b. vessel, port of shipment," as used in this clause, means free of expense to the Government loaded, stowed, and trimmed on board the ocean vessel at the specified port of shipment. (b) The Contractor shall- (1) (i) Pack and mark the shipment to comply with contract specifications; or (ii) In the absence of specifications, prepare the shipment for ocean transportation in conformance with carrier requirements to protect the goods and to ensure assessment of the lowest applicable transportation charge; (2) (i) Deliver the shipment on board the ocean vessel in good order and condition on the date or within the period fixed; and (ii) Pay and bear all charges incurred in placing the shipment actually on board; (3) Provide a clean ship’s receipt or on-board ocean bill of lading; (4) Be responsible for any loss of and/or damage to the goods occurring before delivery of the shipment on board the ocean vessel; and (5) At the Government’s request and expense, assist in obtaining the documents required for- (i) Exportation; or (ii) Importation at destination. (End of clause)