Glossary
FOB Destination
Tags: Glossary
Title passes at the destination, and the seller has total responsibility until the shipment is delivered.
What is FOB Destination?
FOB Destination
FOB Destination is a term commonly used in logistics to describe a specific type of shipping arrangement between a buyer and a seller. In this arrangement, the title of the goods being shipped passes from the seller to the buyer at the destination, which means that the buyer becomes the legal owner of the goods once they are delivered.
When a shipment is designated as FOB Destination, it implies that the seller holds the responsibility for the goods until they reach the agreed-upon destination. This includes the costs and risks associated with transportation, such as freight charges, insurance, and any potential damages or losses that may occur during transit.
One of the key aspects of FOB Destination is that the seller is responsible for selecting the carrier and arranging the transportation of the goods. They are also responsible for ensuring that the goods are properly packaged and labeled for shipment. This relieves the buyer from the burden of coordinating the logistics and allows them to focus on other aspects of their business.
Once the goods reach the destination, the seller's responsibility ends, and the buyer assumes ownership and control over the shipment. At this point, the buyer is responsible for any further transportation, storage, or handling of the goods.
FOB Destination is often preferred by buyers who want to minimize their risk and have more control over the shipment. By placing the responsibility on the seller until the goods are delivered, the buyer can ensure that they receive the goods in the expected condition and that any potential issues during transit are the seller's responsibility.
In summary, FOB Destination is a shipping arrangement where the seller retains responsibility for the goods until they are delivered to the buyer's specified destination. This arrangement provides the buyer with peace of mind, as they can rely on the seller to handle the logistics and assume any associated risks until the goods are safely in their possession.