What is FOB Origin? What is FOB Origin, Freight Prepaid?

What is FOB Origin?

Free on Board or FOB is an international commercial shipment term used to indicate whether the seller of the buyer is liable for goods that get damaged or destroyed during transit. FOB origin or FOB shipping point refers to the term that the buyer is at risk and can claim ownership of goods once they are shipped by the seller. 

FOB Origin Simplified

The sale is completed at the seller’s dock

The buyer is responsible for the costs and liability of the freight during transport

Responsibility transfers once the goods are aboard the transport

FOB Add-on Terms

These terms may be added to or included in the freight invoice, bill of lading, or other shipping documents. They are as follows:

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

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

FOB Origin Freight Prepaid / 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 takes ownership of the goods at the point of origin