What is Free on Board (FOB)?
TMS Glossary
What is Free on Board (FOB)?
Free on Board (FOB) is a shipping term that defines the point at which ownership and liability for a shipment transfer from the seller to the buyer. It determines who is responsible for freight charges and potential damages.
Why is FOB Important?
- Defines Ownership Transfer – Establishes when risk and responsibility shift.
- Clarifies Freight Costs – Determines whether the buyer or seller pays for shipping.
- Impacts Freight Liability – Specifies who handles insurance for transit risks.
- Improves Supply Chain Transparency – Ensures clear shipping agreements.
FOB Shipping Types
- FOB Origin (FOB Shipping Point) – Buyer assumes responsibility when goods leave the seller’s location.
- FOB Destination – Seller remains responsible until the goods reach the buyer.
Key Features of FreightPOP’s FOB Management Solution
- Automated Freight Cost Allocation – Simplify cost-sharing based on FOB terms.
- Carrier Liability Tracking – Ensure proper coverage for damaged or lost shipments.
- Seamless Integration – Manage FOB terms within TMS and accounting systems.
Learn more about FreightPOP
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