FOB

Definition

Free On Board. A shipping term which indicates that the supplier pays the shipping costs (and usually also the insurance costs) from the point of manufacture to a specified destination, at which point the buyer takes responsibility.

Use FOB in a sentence

If you are buying something from another party you should try to work that it will be FOB shipping into the contract.

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Many manufactures have a policy of FOB because that way they know when the customer gets their product it will be as perfect as possible and the customer has no fault if the product was damaged in route.

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When my company agreed to purchase products from a new supplier, my boss insisted that the supplier pay costs of transshipment and insurance through an FOB arrangement.

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