How about setting Passive to the Connection Mode parameter?

Thanks for your suggestion. I am afraid it also gave me the same error. I have been playing around setting proxy to none and tried different combinations without luck. I wish the error message would be more comprehensive than "Upload failed (at start/before it took off)", I am not sure how i can debug this.

Hi @so_much_more​ FTP can sometimes be difficult to initially configure in FME. Usually the issues I encounter have to do with the FTP URL not set correctly (misspelt, wrong folder, etc.) or a permissions/authentication issue. If uploading doesn't seem to work, you could try the inverse of downloading a file as well to rule out authentication vs URL issues. If this is urgent, I may suggest submitting a support case with us so that we can have this resolved for you in a timely manner. Sorry for the inconvenience!

I found a solution to my problem.

I took it for granted that URL was the destination folder on the target server. It is clearly stated in the FME documentation that URL must be a file. However that was not intuitive for me at since you select "File to Upload". That means that the URL must have a file as a target that yet dont exist.. Essentially you specific it twice, once in the url and once in the File To Upload param. I find that odd..

Thanks for your reply. I found a solution - see my answer below