When is FOB used in shipping?

Question

For businesses that buy or sell goods, when is FOB typically used, and what should companies consider before choosing this type of shipping arrangement?

Vicky · Answer

FOB (Free on Board) is used in shipping when buyers and sellers need to define responsibility for goods during transportation. It specifies when ownership, costs, and risk transfer from the seller to the buyer.

Harry · Answer

FOB is commonly used when the buyer and seller need to clearly define responsibility during shipping. Under FOB terms, the seller handles the goods until they are loaded onto the vessel, after which responsibility generally shifts to the buyer.

Answers