FAR 52.247-38—F.o.b. Inland Carrier, Point of Exportation.
Plain-English Summary
FAR 52.247-38 sets the delivery and risk-allocation rules for contracts using the delivery term “f.o.b. inland carrier, point of exportation.” It explains what that term means, how the contractor must package and mark the shipment, how transportation documents such as commercial bills of lading are to be prepared and distributed, when and where the contractor must deliver the goods, who pays transportation charges to the specified point of delivery, and who bears the risk of loss or damage before delivery. The clause also addresses the contractor’s duty to prepare shipments for ocean transportation when no special specifications exist, so the goods are protected and the lowest applicable transportation charge is obtained. In addition, it requires the contractor, at the Government’s request and expense, to help obtain documents needed for exportation or importation at destination. In practice, this clause is important because it defines the contractor’s shipping obligations and the point at which responsibility shifts, which affects pricing, logistics planning, documentation, and claims for damaged or lost goods.
Key Rules
Meaning of FOB inland carrier
The clause defines “f.o.b. inland carrier, point of exportation” as free of expense to the Government, on board the inland carrier, delivered to the specified export point. This means the contractor’s delivery obligation is satisfied only when the shipment is placed on the carrier at the named export point.
Proper packing and marking
The contractor must pack and mark the shipment to comply with contract specifications. If the contract does not provide specifications, the contractor must prepare the shipment for ocean transportation in a way that protects the goods and supports the lowest applicable transportation charge.
Transportation documents required
The contractor must prepare and distribute commercial bills of lading or other transportation receipts. This ensures the shipment is properly documented for movement, tracking, and any later claims or customs-related needs.
Delivery and transportation charges
The contractor must deliver the shipment in good order and condition in or on the carrier’s conveyance on the date or within the period specified. The contractor must also pay and bear all applicable charges, including transportation costs, to the contract’s specified point of delivery.
Risk of loss before delivery
The contractor is responsible for any loss of or damage to the goods occurring before delivery to the contract’s point of delivery. The risk remains with the contractor until the shipment is delivered as required under the clause.
Assistance with export/import documents
At the Government’s request and expense, the contractor must assist in obtaining documents required for exportation or importation at destination. This is a support obligation, but the Government bears the cost when it requests the assistance.
Responsibilities
Contracting Officer
Use this clause when the contract delivery term is f.o.b. inland carrier, point of exportation, and ensure the solicitation and contract clearly identify the specified point of delivery/exportation. The contracting officer should also understand that this clause allocates shipping risk and costs to the contractor up to the delivery point.
Contractor
Pack and mark the shipment properly, prepare transportation documents, deliver the goods in good order and condition to the specified carrier and location on time, pay all transportation charges to the point of delivery, bear the risk of loss or damage before delivery, and assist with export or import documents when requested by the Government and paid for by the Government.
Government
Specify the delivery point and any packing/marking requirements in the contract, and reimburse the contractor for assistance requested in obtaining exportation or importation documents. The Government also receives the shipment only after the contractor has met the delivery obligation under the clause.
Practical Implications
This clause makes the contractor responsible for logistics performance up to the export point, so contractors should price freight, handling, and packaging accordingly.
If the contract lacks detailed packing or marking instructions, the contractor must still use carrier-appropriate methods that protect the goods and minimize transportation charges; poor packaging can create liability for damage and added costs.
The contractor should keep complete shipping records, including bills of lading and proof of delivery, because disputes often turn on whether delivery occurred in good order and within the required time.
Because the contractor bears loss or damage before delivery, insurance and carrier coordination matter; a shipment damaged before it reaches the specified point is generally the contractor’s problem, not the Government’s.
Requests for export/import documentation assistance should be handled carefully: the contractor must help, but only at the Government’s request and at Government expense, so the parties should document the request and cost responsibility.
Official Regulatory Text
As prescribed in 47.303-10 (c) , insert the following clause in solicitations and contracts when the delivery term is f.o.b. inland carrier, point of exportation: F.o.b. Inland Carrier, Point of Exportation (Feb 2006) (a) The term "f.o.b. inland carrier, point of exportation," as used in this clause, means free of expense to the Government, on board the conveyance of the inland carrier, delivered to the specified point of exportation. (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) Prepare and distribute commercial bills of lading or other transportation receipt; (3) (i) Deliver the shipment in good order and condition in or on the conveyance of the carrier on the date or within the period specified; and (ii) Pay and bear all applicable charges, including transportation costs, to the point of delivery specified in the contract; (4) Be responsible for any loss of and/or damage to the goods occurring before delivery of the shipment to the point of delivery in the contract; 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)