What Does On Board Destination Mean
In FOB shipping point agreements, the seller pays all transportation costs and fees to get the goods to the port of origin. Once the goods are at the point of origin and on the transportation vessel, the buyer is financially responsible for costs to transport the goods such as customs, taxes, and fees."}},"@type": "Question","name": "Who Retains Risk in FOB Shipping Point?","acceptedAnswer": "@type": "Answer","text": "The seller is at-risk until the goods reach the shipping point. Once goods are shipped, the buyer is at-risk. If the goods are damaged in transit, the loss is the responsibility of the buyer.","@type": "Question","name": "Is FOB Destination Better for a Buyer?","acceptedAnswer": "@type": "Answer","text": "FOB destination is more favorable for a buyer. The buyer is not responsible for the goods during transit; therefore, the buyer often is not responsible for paying for shipping costs. The buyer is also able to delay ownership until the goods have been delivered to them, allowing them to do an initial inspection prior to physically accepting the goods to note any damages or concerns.","@type": "Question","name": "Does FOB Mean Free Shipping?","acceptedAnswer": "@type": "Answer","text": "FOB stands for either "free on board" or "freight on board". The term is used to designate ownership between the buyer and seller as goods are transported. FOB does not explicitly mean the transportation of goods is free."]}]}] Investing Stocks Bonds Fixed Income Mutual Funds ETFs Options 401(k) Roth IRA Fundamental Analysis Technical Analysis Markets View All Simulator Login / Portfolio Trade Research My Games Leaderboard Economy Government Policy Monetary Policy Fiscal Policy View All Personal Finance Financial Literacy Retirement Budgeting Saving Taxes Home Ownership View All News Markets Companies Earnings Economy Crypto Personal Finance Government View All Reviews Best Online Brokers Best Life Insurance Companies Best CD Rates Best Savings Accounts Best Personal Loans Best Credit Repair Companies Best Mortgage Rates Best Auto Loan Rates Best Credit Cards View All Academy Investing for Beginners Trading for Beginners Become a Day Trader Technical Analysis All Investing Courses All Trading Courses View All TradeSearchSearchPlease fill out this field.SearchSearchPlease fill out this field.InvestingInvesting Stocks Bonds Fixed Income Mutual Funds ETFs Options 401(k) Roth IRA Fundamental Analysis Technical Analysis Markets View All SimulatorSimulator Login / Portfolio Trade Research My Games Leaderboard EconomyEconomy Government Policy Monetary Policy Fiscal Policy View All Personal FinancePersonal Finance Financial Literacy Retirement Budgeting Saving Taxes Home Ownership View All NewsNews Markets Companies Earnings Economy Crypto Personal Finance Government View All ReviewsReviews Best Online Brokers Best Life Insurance Companies Best CD Rates Best Savings Accounts Best Personal Loans Best Credit Repair Companies Best Mortgage Rates Best Auto Loan Rates Best Credit Cards View All AcademyAcademy Investing for Beginners Trading for Beginners Become a Day Trader Technical Analysis All Investing Courses All Trading Courses View All Financial Terms Newsletter About Us Follow Us Facebook Instagram LinkedIn TikTok Twitter YouTube Table of ContentsExpandTable of ContentsFOB OverviewFOB Shipping PointFOB DestinationKey DifferencesSpecial ConsiderationsExampleFOB Shipping FAQsThe Bottom LineBusinessSupply ChainFOB Shipping Point vs. FOB Destination: What's the Difference?BySteven NickolasFull BioSteven Nickolas is a freelance writer and has 10+ years of experience working as a consultant to retail and institutional investors.Learn about our editorial policiesUpdated November 30, 2022Reviewed byKhadija Khartit Reviewed byKhadija KhartitFull Bio LinkedIn Twitter Khadija Khartit is a strategy, investment, and funding expert, and an educator of fintech and strategic finance in top universities. She has been an investor, entrepreneur, and advisor for more than 25 years. She is a FINRA Series 7, 63, and 66 license holder.Learn about our Financial Review BoardFact checked byTimothy Li Fact checked byTimothy LiFull Bio LinkedIn Timothy Li is a consultant, accountant, and finance manager with an MBA from USC and over 15 years of corporate finance experience. Timothy has helped provide CEOs and CFOs with deep-dive analytics, providing beautiful stories behind the numbers, graphs, and financial models.Learn about our editorial policies Free on Board Shipping Point vs. Free on Board Destination: An Overview International commercial laws have been in place for decades and were established to standardize the rules and regulations surrounding the shipment and transportation of goods. Having special contracts in place has been important because international trade can be complicated and because trade laws differ between countries.
What Does On Board Destination Mean
FOB stands for either "free on board" or "freight on board". The term is used to designate ownership between the buyer and seller as goods are transported. FOB does not explicitly mean the transportation of goods is free.
The costs associated with FOB can include transportation of the goods to the port of shipment, loading the goods onto the shipping vessel, freight transport, insurance, and unloading and transporting the goods from the arrival port to the final destination."}},"@type": "Question","name": "Who Pays Freight for FOB Origin?","acceptedAnswer": "@type": "Answer","text": "If the terms include the phrase "FOB origin, freight collect," the buyer is responsible for freight charges. If the terms include "FOB origin, freight prepaid," the buyer assumes the responsibility for goods at the point of origin, but the seller pays the cost of shipping.","@type": "Question","name": "What Is the Difference Between FOB and CIF?","acceptedAnswer": "@type": "Answer","text": "CIF (Cost, Insurance, and Freight) and FOB (Free on Board) are two widely used INCOTERM agreements. Although the definition of both terms can differ across countries and is ultimately determined by each vendor-client contract, historically, FOB transfers liability from seller to buyer when the shipment reaches the port or other facility designated as the point of origin. With a CIF agreement, the seller pays costs and assumes liability until the goods reach the port of destination chosen by the buyer."]}]}] Investing Stocks Bonds Fixed Income Mutual Funds ETFs Options 401(k) Roth IRA Fundamental Analysis Technical Analysis Markets View All Simulator Login / Portfolio Trade Research My Games Leaderboard Economy Government Policy Monetary Policy Fiscal Policy View All Personal Finance Financial Literacy Retirement Budgeting Saving Taxes Home Ownership View All News Markets Companies Earnings Economy Crypto Personal Finance Government View All Reviews Best Online Brokers Best Life Insurance Companies Best CD Rates Best Savings Accounts Best Personal Loans Best Credit Repair Companies Best Mortgage Rates Best Auto Loan Rates Best Credit Cards View All Academy Investing for Beginners Trading for Beginners Become a Day Trader Technical Analysis All Investing Courses All Trading Courses View All TradeSearchSearchPlease fill out this field.SearchSearchPlease fill out this field.InvestingInvesting Stocks Bonds Fixed Income Mutual Funds ETFs Options 401(k) Roth IRA Fundamental Analysis Technical Analysis Markets View All SimulatorSimulator Login / Portfolio Trade Research My Games Leaderboard EconomyEconomy Government Policy Monetary Policy Fiscal Policy View All Personal FinancePersonal Finance Financial Literacy Retirement Budgeting Saving Taxes Home Ownership View All NewsNews Markets Companies Earnings Economy Crypto Personal Finance Government View All ReviewsReviews Best Online Brokers Best Life Insurance Companies Best CD Rates Best Savings Accounts Best Personal Loans Best Credit Repair Companies Best Mortgage Rates Best Auto Loan Rates Best Credit Cards View All AcademyAcademy Investing for Beginners Trading for Beginners Become a Day Trader Technical Analysis All Investing Courses All Trading Courses View All Financial Terms Newsletter About Us Follow Us Facebook Instagram LinkedIn TikTok Twitter YouTube Table of ContentsExpandTable of ContentsWhat Is Free on Board (FOB)?Understanding FOBFOB Origin vs. FOB DestinationOther Shipping TermsFOB FAQsThe Bottom LineLaws & RegulationsInvesting LawsFree on Board (FOB) Explained: Who's Liable for What in Shipping?ByCaroline BantonFull Bio LinkedIn Twitter Caroline Banton has 6+ years of experience as a freelance writer of business and finance articles. She also writes biographies for Story Terrace.Learn about our editorial policiesUpdated March 25, 2023Reviewed byMargaret JamesFact checked byTimothy Li Fact checked byTimothy LiFull Bio LinkedIn Timothy Li is a consultant, accountant, and finance manager with an MBA from USC and over 15 years of corporate finance experience. Timothy has helped provide CEOs and CFOs with deep-dive analytics, providing beautiful stories behind the numbers, graphs, and financial models.Learn about our editorial policies Xiaojie Liu / Investopedia 041b061a72