NAPM Insights

What Does "F.O.B. Shipping Point" Mean? Members Only Content

When people are asked, "What does F.O.B. Shipping Point mean?," they respond with a great variety of answers. Though one person's "Friend of Bill" is not typical, others often say "Freight on Board at the Shipping Point." To many, "F.O.B. Shipping Point" means that the purchaser is responsible for paying the freight and the title to the goods transfers at the seller's dock. Still others say they are not sure what it means, but they think it has something to do with title transfer and risk of loss, plus who pays for the freight. And despite all the literature written on this subject, purchase orders are issued every day using F.O.B. in a variety of ways (e.g., F.O.B. Shipping Point, Freight Collect & Allowed). For the reader, an attempt is made here to "set the record straight."

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