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.