Definition
from freightcenter.com
FOB stands for free on board, a shipping term used in U.S. and international commercial law. After the letters FOB, there is generally a designation of a place where title and control pass to the buyer. For example, FOB Plant means that the control and title to the goods pass to the buyer at the seller’s plant origin.
FOB destination is a shipping term that indicates the seller pays the freight to the destination. Title does not pass until the merchandise reaches its destination; thus, the seller assumes all risks, loss, or damage while goods are in transit, except for the liability of the carrier.
FOB origin is a form of geographical pricing in which the seller quotes prices from the point of shipment. It’s the buyer’s responsibility to select the mode of transporting the goods, choose the specific carrier, handle all claims, and pay all shipping charges.
See also
Distribution
Distribution channel
References
- American Marketing Association, AMA Dictionary.