Abbreviated as FOB, Free on Board refers to an international shipping term that specifies when ownership of goods transfers from the seller to the buyer. FOB shipping is governed by International Commercial Terms (Incoterms) and outlines who is responsible for shipping costs, insurance, and risk during transit.
In Free on Board shipping, responsibility can transfer at the origin, when the buyer takes ownership upon loading goods, or at the destination, when the seller retains ownership until delivery. Understanding what FOB means in shipping is crucial for freight contracts, especially for overseas transport, as the FOB shipping definition clarifies ownership and liability throughout the shipment process.