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The term "FOB" denotes: Group of answer choices free on board. freight on board. free only (to) buyer. freight charge on buyer.

Question

The term "FOB" denotes:

  • free on board.
  • freight on board.
  • free only (to) buyer.
  • freight charge on buyer.
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Solution

The term "FOB" denotes:

Free On Board.

Here's why:

  1. FOB is a shipping term used in international trade to determine when the ownership of goods is transferred from the seller to the buyer.

  2. "Free On Board" means that the seller is responsible for the goods until they are loaded on board the ship at the shipping point. After that, the responsibility and risk transfer to the buyer.

  3. There are two types of FOB - FOB shipping point (or FOB origin) and FOB destination. In FOB shipping point, the buyer takes responsibility for the goods as soon as they leave the seller's premises. In FOB destination, the seller retains responsibility until the goods reach the buyer's location.

  4. The terms "freight on board", "free only (to) buyer", and "freight charge on buyer" are not standard shipping terms and do not accurately represent the meaning of FOB.

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