# What Is "Freight on Board"? **URL:** \ **Category:** Factual Questions\ **Created:** [November 27, 2013, 7:07pm UTC](https://boards.straightdope.com/t/what-is-freight-on-board/674942 "2013-11-27T19:07:23Z")\ **Posts on this page:** 12\ **Page:** 1
**Author:** ![Jinx](https://avatars.discourse-cdn.com/v4/letter/j/c6cbf5/32.png) [@Jinx](https://boards.straightdope.com/u/Jinx)\ **Post date:** [November 27, 2013, 7:07pm UTC](https://boards.straightdope.com/t/what-is-freight-on-board/674942/1 "2013-11-27T19:07:23Z")
I have Googled and found two definitions of “Freight on Board” (FOB). It is either free shipping, OR it means the cost of shipping is strictly delivery and DOES NOT include offloading of materials. Are both correct? ---
**Author:** ![robert\_columbia](https://avatars.discourse-cdn.com/v4/letter/r/e79b87/32.png) [@robert\_columbia](https://boards.straightdope.com/u/robert_columbia)\ **Post date:** [November 27, 2013, 7:19pm UTC](https://boards.straightdope.com/t/what-is-freight-on-board/674942/2 "2013-11-27T19:19:39Z")
I’ve heard FOB defined as “Free on Board” and thought it had something to do with exactly when ownership was transferred and liability. E.g. in some cases, the product legally becomes yours and is treated as delivered when the seller ships it and if the vehicle carrying it gets picked up by a tornado and thrown in the depths of the ocean and your product is never found, sucks to be you. On the other hand, in some cases the product remains the seller’s property and responsibility until you _physically_ pick it up or it arrives at your location, meaning that if they lose it during shipment they have to replace it in order to actually make delivery, as it’s their loss, not yours. ---
**Author:** ![Fluffy\_PickleSniffer](https://avatars.discourse-cdn.com/v4/letter/f/77aa72/32.png) [@Fluffy\_PickleSniffer](https://boards.straightdope.com/u/Fluffy_PickleSniffer)\ **Post date:** [November 27, 2013, 7:22pm UTC](https://boards.straightdope.com/t/what-is-freight-on-board/674942/3 "2013-11-27T19:22:56Z")
When we ship things out at work by freight, we can do the F.O.B. by our location or by the customer’s location. Usually we like it set to ours, because that means the customer will pay freight from our dock to theirs. If it’s set to the customer’s location (which some customers insist on), then we pay the freight. ETA: I don’t do the shipping part of the business though so that’s as far as I can explain it. Hope that helps a little. ---
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [November 27, 2013, 8:11pm UTC](https://boards.straightdope.com/t/what-is-freight-on-board/674942/4 "2013-11-27T20:11:49Z")
It is not “freight on board” but “free on board Port X” and is a deprecated [INCOTERM](http://en.wikipedia.org/wiki/Incoterms) > [@](#): > > FOB – Free on Board (named port of shipment) > > The seller must load the goods on board a vessel designated by the buyer. Cost and risk are divided when the goods are actually on board of the vessel. The seller must clear the goods for export. The term is applicable for maritime and inland waterway transport only but NOT for multimodal sea transport in containers (see Incoterms 2010, ICC publication 715). The buyer must instruct the seller the details of the vessel and the port where the goods are to be loaded, and there is no reference to, or provision for, the use of a carrier or forwarder. This term has been greatly misused over the last three decades ever since Incoterms 1980 explained that FCA should be used for container shipments. > > It means the seller pays for transportation of goods to the port of shipment, loading cost. The buyer pays cost of marine freight transportation, insurance, uploading and transportation cost from the arrival port to destination. The passing of risk occurs when the goods are on board the vessel. ---
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [November 27, 2013, 8:21pm UTC](https://boards.straightdope.com/t/what-is-freight-on-board/674942/5 "2013-11-27T20:21:24Z")
> [@Fluffy\_PickleSniffer](#): > > When we ship things out at work by freight, we can do the F.O.B. by our location or by the customer’s location. This makes no sense. FOB means the customer pays the shipping. See the incoterms. ---
**Author:** ![Amateur\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/a/59ef9b/32.png) [@Amateur\_Barbarian](https://boards.straightdope.com/u/Amateur_Barbarian)\ **Post date:** [November 27, 2013, 9:19pm UTC](https://boards.straightdope.com/t/what-is-freight-on-board/674942/6 "2013-11-27T21:19:52Z")
> [@sailor](#): > > This makes no sense. FOB means the customer pays the shipping. See the incoterms. Combination of this and what Fluffy said. The sender sees the freight “free” (of inspection, customs, fees, etc.) into the shipping process, and payment and delivery is at the receiver’s cost from there. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [November 27, 2013, 9:41pm UTC](https://boards.straightdope.com/t/what-is-freight-on-board/674942/7 "2013-11-27T21:41:04Z")
What are you having shipped and from where, in general? ---
**Author:** ![Fuzzy\_Dunlop](https://avatars.discourse-cdn.com/v4/letter/f/848f3c/32.png) [@Fuzzy\_Dunlop](https://boards.straightdope.com/u/Fuzzy_Dunlop)\ **Post date:** [November 27, 2013, 9:43pm UTC](https://boards.straightdope.com/t/what-is-freight-on-board/674942/8 "2013-11-27T21:43:29Z")
> [@sailor](#): > > This makes no sense. FOB means the customer pays the shipping. See the incoterms. It makes no sense but it’s a common use in business nonetheless. People use it as if it means “responsibility for the merchandise passes to the customer starting…” followed by a description of when or where that happens. Essentially reducing all incoterms to “FOB” and including a qualifier. It’s particularly annoying when you negotiate an actual agreement with a customer or vendor and then their purchasing rep or shipping clerk insists on putting some gibberish on the shipment that makes literally no sense. ---
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [November 27, 2013, 10:12pm UTC](https://boards.straightdope.com/t/what-is-freight-on-board/674942/9 "2013-11-27T22:12:04Z")
> [@Fuzzy\_Dunlop](#): > > It makes no sense but it’s a common use in business nonetheless. I have been purchasing for decades and have never seen it. Maybe I am used to dealing with larger, competent firms. Anyone who uses FOB in a contract to mean something else is a fool and clearly incompetent. It is a recipe for disaster. No lawyer would even consider it. Incoterms are very precisely and clearly defined for a purpose and businesses use them to make things clear. > [@](#): > > The Incoterms rules are accepted by governments, legal authorities, and practitioners worldwide for the interpretation of most commonly used terms in international trade. They are intended to reduce or remove altogether uncertainties arising from different interpretation of the rules in different countries. As such they are regularly incorporated into sales contracts worldwide. A sales contract with contradictory terms is a recipe for disaster and a sign of clearly incompetent people. I can only imagine this happening in a tiny outfit with someone trying to sound “proffesional” but out of their depth. I have never seen it in any decent place and I can’t imagine it. “Yes, your honor, when we signed a contract saying I would pay for shipping we really meant he would pay for shipping”. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [November 27, 2013, 10:45pm UTC](https://boards.straightdope.com/t/what-is-freight-on-board/674942/10 "2013-11-27T22:45:59Z")
FOB does mean that the Buyer pays for shipping. But it also means that the responsibility for the merchandise passes from the seller to the common freight carrier once the carrier inspects and signs for it. This used to be common with bad eBay sellers. They’d just toss “FOB” somewhere in their ToS and if it was “lost in the mail” they’d shrug their shoulders and go “Tough shit”. However, eBay no longer puts up with that shit, and of course the scum seller wouldn’t actually ship via freight, just USPS UPS, etc. ---
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [November 27, 2013, 11:18pm UTC](https://boards.straightdope.com/t/what-is-freight-on-board/674942/11 "2013-11-27T23:18:22Z")
Oh, if we are talking about eBay then FOB means “a tiny outfit with someone trying to sound “proffesional” but out of their depth and not having a clue”. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [November 28, 2013, 12:43am UTC](https://boards.straightdope.com/t/what-is-freight-on-board/674942/12 "2013-11-28T00:43:41Z")
True.🆒