“FOB” usually means “free on board.” It is a shipping term that tells you when responsibility for goods changes from the seller to the buyer. In simple terms, it helps show who is in charge of the items at each stage of delivery.
People use FOB most often in trade, shipping, and business deals. It helps both sides understand who pays for shipping, who handles the risk, and when the buyer becomes responsible for the goods. You may see it on invoices, contracts, or shipping documents.
Meaning & Usage
FOB is used to explain delivery terms in a sale. For example, if a deal says “FOB shipping point,” the buyer takes responsibility once the goods leave the seller. If it says “FOB destination,” the seller stays responsible until the goods arrive.
Examples
A company ships boxes to a customer and the contract says “FOB shipping point.” That means the buyer is responsible once the boxes are sent out. In another case, “FOB destination” means the seller is responsible until the goods reach the buyer’s location.
What does FOB stand for?
FOB stands for “free on board.” It is a common shipping term used in business and trade.
Why is FOB important?
FOB is important because it shows who is responsible for the goods during shipping and when that responsibility changes.
Is FOB used only in shipping?
It is mostly used in shipping and trade, but you may also see it in contracts and sales agreements.
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