FOB (Freight on Board) Destination is a shipping term that means the seller of the product keeps legal title to the goods while they are in transit to the buyer. The title to the goods passes to the buyer once they have arrived at their doorstep.
FOB Destination means the seller is generally liable for shipping and freight charges, and the seller is responsible if the goods are damaged or lost while in transit to the buyer.
In contrast, FOB Shipping Point means the title to goods passes to the buyer once the goods leave the seller’s business and are placed on the delivery vehicle.
Sample Terms for FOB Destination
Responsibility for Shipping Costs: The seller is responsible for paying all of the shipping costs in order to deliver the goods to the buyer.
Transfer of Risk: The risk of loss or damage to the goods while in transit will remain with the seller. If the goods are damaged, lost, or stolen, before they arrive at the buyers location, the seller is responsible for the loss.
Transfer of Ownership: The buyer will only take ownership over the goods once they are delivered to the buyers physical location.
Insurance: The seller is generally responsible for paying for insurance to cover the goods while in transit from the sellers location to the buyers location.