What is FOB Origin?
FOB is an acronym for Freight on Board. Also referred to as FOB shipping or FOB shipping point, “FOB origin” is an international commercial law term that indicates a sale to be considered complete at the seller’s shipping dock. According to the FOB Origin protocol, the buyer of the goods becomes responsible for the costs and liability of the freight during the transport of the goods. The transfer occurs as soon as the goods are safely onboard the transport.
FOB Origin Simplified
The sale is completed at the seller’s dock
The buyer of the goods is responsible for the costs and liability of the freight during transport
Responsibility transfers once the goods are on board the mode of transport
FOB Add-on Terms
These terms may be added to or included in the freight invoice, bill of lading, or other forms of shipping documentation. They are as follows:
What is FOB Origin, Freight Prepaid?
- The seller or shipper pays the cost of shipping
- The buyer or receiver of goods assumes the responsibility of goods at the point of origin
What is FOB Origin, Freight Collect?
- The buyer pays for freight and shipping costs
- The buyer assumes full responsibility for the cargo until it reaches the point of destination or drop off
What is FOB Origin, Freight Prepaid, and Charged Back?
- The seller does not pay the cost of shipping
- The seller adds the freight costs to the invoice sent to the buyer
- The buyer pays the bill on a more expensive invoice- because freight costs are included on this invoice
- The buyer takes ownership of the goods at the point of origin