What is the difference between FOB shipping and FOB destination?

What is the difference between FOB shipping and FOB destination?

Free on board shipping point indicates that the buyer takes responsibility for loss or damage the moment the goods get to the shipper. Free on board destination indicates that the seller retains liability for loss or damage until the goods are delivered to the buyer.

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.

Who pays shipping costs 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.

What does 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 does FBO mean in shipping?

Free on Board: Free on board indicates whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping.

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 uses FOB destination?

Free on Board (FOB) is a term used to indicate who is liable for goods damaged or destroyed during shipping. “FOB origin” means the buyer is at risk once the seller ships the product. “FOB destination” means the seller retains the risk of loss until the goods reach the buyer.

Who is responsible for FOB shipping point?

Difference #3. When it comes to the FOB shipping point, the transport cost and fees are the responsibility of the seller until the products are delivered to the port from where they will be sent to the buyer. Once they are on board — the buyer becomes a financially responsible figure.

Is FOB shipping safe?

Free on Board, or FOB is an Incoterm, which means the seller is responsible for loading the purchased cargo onto the ship, and all costs associated. The point the goods are safe aboard the vessel, the risk transfers to the buyer, who assumes the responsibility of the remainder of the transport.