Freight on Board (FOB)
Freight on Board (FOB) is a shipping term that defines the point at which ownership and responsibility for goods transfer from the seller to the buyer. It also determines who pays for shipping and insurance costs.
Key FOB terms include:
- FOB Origin: Buyer assumes responsibility once goods leave the seller's facility.
- FOB Destination: Seller retains responsibility until goods reach the buyer's location.
Understanding FOB terms is critical for procurement professionals to manage shipping costs, risks, and responsibilities effectively. These terms are often included in purchase orders and contracts to avoid disputes during transit.
Related Terms
Goods Receipt Note (GRN)
A Goods Receipt Note (GRN) is an internal document created by a receiving depart...
Learn moreLanded Cost
Landed Cost represents the total cost of a product once it has arrived at the bu...
Learn moreIncoterms
Incoterms® (International Commercial Terms) are a set of pre-defined commercial ...
Learn moreRelated Resources
AuraVMS RFQ Software
Create RFQs, collect private responses, compare offers, and place an order.
Free Procurement Tools
Purchase order generator, tail spend calculator, and more
AuraVMS Features
Anonymous bidding, quote comparison, order placement, and more
Free RFQ Template Builder
Create a supplier-ready request, then copy, download, or print it
Explore More Supply Chain Terms
Enhance your procurement knowledge with our comprehensive glossary
Browse Full GlossaryReady to streamline your procurement process?
Start your free trial today and see how AuraVMS can transform your vendor management.