What is FOB destination mean?

What is FOB destination mean?

Free on Board: Destination In a FOB destination agreement, the seller retains ownership of the goods (and is therefore responsible for replacing damaged or lost goods) up until the point where the goods have reached their final destination.

What is FOB shipping point and FOB destination with example?

In FOB Shipping Point, the ownership transfers when the shipment leaves the seller’s warehouse (or shipping dock). Under FOB Destination, the title of the goods transfers at the buyer’s loading dock or warehouse. Or, the title of the goods transfers once the goods reach the buyer’s specified location.

What is FOB with example?

Initially, the meaning of FOB was freight on board. It is still in use in many parts of the world. If the goods are shipped from New Jersey as “FOB New Jersey,” that will mean that the responsibility of the seller is to get the shipment to the boat in precise order.

Who pays the freight on FOB destination?

FOB Destination, Freight Prepaid: The seller/shipper pays all the shipping costs until the cargo arrives at the buyer’s store. The buyer does not pay any shipping costs. FOB Destination, Freight Collect: The receiver of goods (the buyer) pays the freight charges upon delivery of the goods.

How do you do FOB destination?

Does FOB destination mean free shipping?

In shipping arrangements classified as FOB Destination, Freight Collect, the buyer is responsible for shipping costs. In FOB Destination, Freight Prepaid & Add arrangements, the seller pays for the shipping costs but then passes on the cost to the buyer.