What does FOB stand for?

Question

What does FOB stand for in business and shipping? How does FOB affect responsibilities, costs, and risk between a buyer and seller in a transaction?

Christina · Answer

Oh that's just "Free On Board," basically it tells you at what point the seller hands off responsibility (and risk) for the goods to the buyer during shipping. So if it says FOB origin, you're on the hook the moment it leaves the seller's dock, but FOB destination means the seller's still responsible till it reaches you.

Kevin · Answer

"Oh well, it's just the 'Free On Board' which more or less means it is the time during shipping when the seller transfers the risk and responsibility for the shipment to the buyer. So, when the Free On Board Origin is specified, it means that as soon as the ship leaves the dock of the seller, the risk passes to you."

Alex · Answer

And oh that is “Free On Board,” and all it simply means is that the point at which the seller transfers responsibility for the shipment from themselves to the buyer is clearly specified. In other words, “FOB origin” means the buyer assumes responsibility from the time it departs from the seller’s dock while “FOB destination” means the seller remains responsible until the buyer receives it.

Answers