FOB shipping Vs FOB destination

FOB stands for Free on Board

In case of international trade, terms like FOB or Free on board shipping and FOB destination are noticed. It helps to determine the goods title that is generally transferred from a seller to a buyer. Through the FOB shipping point, indication is given that goods have been transported to the buyer by the seller. By placing the goods on the delivery truck, it is possible to come across this FOB shipping point. However, FOB destination implicates the fact that the goods have been delivered to the destination of buyer.

Through the FOB shipping point, title of the goods is generally transferred to buyer. It is started from the time goods have been placed inside the truck. The process can be considered as a legal transfer of the goods right. Due to this reason, seller cannot be held responsible for the delivery of the goods at any given occasion.

As an example, it can be said that a company has bought an electronic appliance from a supplier that is situated in China.  In the very beginning of the transaction process, FOB shipping point is generally signed by the buyer. In case the damage has occurred during delivery of the product then the supplier may not reimburse the company. Responsibility of the customer is to bring the product to the carrier only.

On the other hand, transfer of the documents and legal rights generally happen at the loading dock of buyer in case of FOB destination. It can be an office building or a post office also. If the goods are delivered to the location then title of the goods are transferred on the occasion only. In this way, goods are owned legally by the seller and complete responsibility of the shipping process is taken by the seller.

For example, if a company buys a computer from a supplier from United States of America and signs an agreement of FOB destination then it is responsibility of the seller to offer the product in adequate manner. Suppose, the computer has not been delivered to the destined location then seller takes complete responsibility for the damage. On the occasion, reimbursement may be given by the seller. However, the seller can also reship the computer once again for company’s advantage.

In short, you can create Fob shipping Vs Fob Destination through its definition.

FOB Destination:

Through the word FOB Destination, you can come across at a freight term.  Goods are placed on the ship and delivered to the buyer. Cost of the freight is also paid by the seller.

FOB Shipping

Freight term can be found with FOB shipping also. Goods are sent to the destined location on the occasion also. However, money for the freight is generally paid by the buyer.

FOB Shipping Vs FOB Destination

Simply with the loading of the goods, title is transferred to the buyer. Legal complication is avoided by the seller easily on the occasion. In case of FOB destination, responsibility of the delivering the goods resides with the seller only.

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