Freight Terms Explained

Have you ever shipped or received product and the shipping terms stated FOB Origin or FOB Destination? Freight On Board / Free On Board or FOB is a very common term in the freight industry, but one that is most misunderstood. This is because the term that follows FOB has multiple conditions such as for who pays for the shipment, who bears the shipping costs, who owns the product as it’s being shipped, and who is responsible for risk while it’s in shipment. Buyers and sellers of product will usually define in the shipping contract the shipping terms to address these conditions. But it can become an issue if only “FOB Origin” or “FOB Destination” are stated. There should be more indication since there are more standards that exist. Continue reading