Freight on Board (FOB)

Freight on Board (FOB) is a shipping term that indicates whether the seller or buyer is responsible for goods during transit. It specifies the point at which ownership and risk transfer from the seller to the buyer. For example, under FOB Shipping Point, the buyer assumes responsibility once the goods leave the seller’s location. Conversely, FOB Destination means the seller retains responsibility until the goods arrive at the buyer’s specified location. Clearly defining FOB terms helps prevent misunderstandings about shipping costs, responsibilities, and liabilities in a transaction.