The scenario describes the seller's responsibility ending and the buyer's risk beginning at the precise moment the goods are loaded on board the vessel at the port of shipment. This is the specific definition of the Free On Board (FOB) Incoterm. Under FOB, the seller fulfills their delivery obligation when the goods are on the vessel, and the risk of loss or damage transfers to the buyer at that same point. This term is designated for sea and inland waterway transport.

B. DAP – Cost and Freight: This is not a valid Incoterm. It appears to be a conflation of 'Delivered at Place' (DAP) and 'Cost and Freight' (CFR).

C. CIF – Cost Insurance and Freight: While risk also transfers when goods are on board the vessel, CIF additionally requires the seller to procure and pay for insurance, an obligation not mentioned in the question.

D. FAS – Free Alongside Ship: Under FAS, risk transfers when the goods are placed alongside the vessel (e.g., on the quay), not once they are loaded on board.

1. International Chamber of Commerce (ICC). (2019). Incoterms® 2020: ICC rules for the use of domestic and international trade terms. ICC Publication No. 723E.

FOB (Free On Board) A2/B2 Delivery/Taking Delivery & A3/B3 Transfer of Risks: The guide specifies that the seller delivers the goods by placing them on board the vessel nominated by the buyer. The risk of loss or damage transfers from the seller to the buyer at this exact point. This directly confirms option A.

FAS (Free Alongside Ship) A3/B3 Transfer of Risks: The rules state that risk transfers when the goods are placed alongside the vessel

which contradicts the scenario.

CIF (Cost Insurance and Freight) A2/B2 & A3/B3: The risk transfer point is the same as FOB (on board the vessel)

but the seller also has the A5 obligation to contract for insurance cover against the buyer's risk. The question's scope is limited to delivery and risk transfer

making FOB the most precise answer.

2. Cornell Law School Legal Information Institute (LII). (n.d.). Free on Board (FOB). Wex Legal Dictionary / Encyclopedia.

"Under the Incoterms 2020 rules

FOB means the seller has fulfilled its obligation when the goods are loaded on board the vessel nominated by the buyer at the named port of shipment. The risk of loss or damage is transferred to the buyer once the products are on board the ship." This academic legal resource corroborates the definition and risk transfer point described in the question.

3. CIPS. (2018). Procurement and Supply in Practice (L4M8 CIPS Level 4 Diploma in Procurement and Supply Study Guide). Profex Publishing Limited.

Chapter 5: Sourcing

Section on Incoterms: The official CIPS study materials define FOB in line with the ICC rules

stating that the seller is responsible for placing the goods on board the ship nominated by the buyer

at which point risk passes to the buyer. This aligns directly with the scenario presented.