FOB (Free On Board)

FOB, or “Free On Board”, is a common term used in the context of procurement to define when the title and responsibility for goods transfers from the seller to the buyer. In an FOB agreement, once the goods have been loaded onto the designated vessel or delivery method selected by the buyer, the risk and ownership of the goods transfer over to the buyer. FOB agreements are typically used during international shipments, where costs related to insurance and other fees relating to damage or loss are also accounted for separately.