FOB, meaning free on board, is transportation jargon. FOB means that the shipper assumes responsibility, including shipping cost, up to and including loading onto the transport vessel/vehicle at the designated place. After that, it becomes the responsibility of the consignee.
Right. FOB designates the point at which the consignee assumes responsibility (cost) for the shipping of the freight. I include this term in my quotes every day. For 90% of my customers it’s “FOB: Shipping point” which means as soon as my vendor gives the goods to the freight company, it belongs to the consignee and they pay all freight costs. If UPS loses the package, it’s their tough luck and they have to file the claim with UPS. Some of my larger customers demand “FOB: Delivered” which in reality means I build the freight costs into the quoted price of the goods. This is not the same as freight “Terms” which designates how the freight costs will be billed. Freight can be “Prepaid” or “Prepay and add” or “Collect.” “Prepay and add” is by far the most common which means I ship the goods on my UPS account and add freight as a separate line of billing to the invoice. Then there’s the tax issues. Here in California, “Dropship” (also called “Ship Direct") freight is not taxable. “Inbound” freight, where the vendor ships to me and I then ship to the customer is taxable. Freight is tricky and often represents a sizable portion of the total cost of goods. You can easily lose all your profit on a deal if you don’t understand all the nuances and don’t quote and bill it correctly.