FOB (Freight on Board) Destination is a shipping term which means that the seller retains the legal title to the goods until they reach the location of the buyer. In this case, the seller pays for the transportation of the freight and takes care of additional freight charges until the goods reach the buyer.
FOB Destination Simplified
The seller owns the goods in transit and is responsible for freight charges
The seller assists with the settlement of claims and is responsible for full-replacement of damaged items
Title passes when the goods reach their destination: the seller keeps title and control until delivered to and accepted by the buyer
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:
Freight Prepaid / Allowed
– Title passes to the buyer when goods arrive at the buyer’s location or dock
– The seller pays and bears freight charges
– The seller owns goods while in transit
– The seller files claims, whenever needed
Freight Prepaid / Added
– The title passes to the buyer when goods arrive at the buyer’s location
– The seller pays for the freight and adds to the buyer’s invoice
– The buyer bears all freight charges
– The seller owns freight goods while in transit
– The seller files claims whenever needed
Freight Collect
– The title passes to the buyer when goods arrive at the buyer’s location
– The buyer pays freight charges when goods are received
– The buyer bears freight charges
– The seller owns goods while in transit
– The seller files claims whenever needed
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Freight Collect / Allowed
– The title passes to the buyer when the goods arrive at the buyer’s location
– The buyer pays for the freight shipment
– The buyer collects freight charges from the supplier by deducting the shipment amount from the invoice
– The buyer collects freight charges from the supplier by deducting the amount from the invoice
– The seller files claims whenever needed
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