FOB meaning in shipping: who owns the freight on the truck
FOB stands for free on board. On a U.S. domestic shipment it says where ownership, and the risk of loss, passes from the seller to the buyer.
FOB meaning, term by term
FOB origin, also written FOB shipping point, means the buyer owns the goods once the carrier picks them up. If the freight is damaged on the way, the buyer files the claim.
FOB destination means the seller owns the goods until they are delivered. Damage in transit is the seller’s problem, and the seller files the claim.
FOB is not the same as who pays the freight
Ownership and payment are separate terms. Freight prepaid means the seller pays the carrier. Freight collect means the buyer pays. Prepaid and add means the seller pays the carrier and then adds the cost to the buyer’s invoice.
So FOB origin, freight prepaid is a common pairing: the seller books and pays for the truck, and the buyer owns the goods from the moment they leave the dock.
Why it matters when something goes wrong
The FOB term decides who can file a freight claim and who carries the loss while the claim is open. Check the purchase order or the sales contract before you book, because the bill of lading should match it.
Ocean and international shipments use Incoterms instead, where FOB has a narrower meaning tied to loading onto a vessel. This page covers the domestic truck use.
Related terms
Quick answers
What is the difference between FOB origin and FOB destination?
FOB origin moves ownership to the buyer at pickup. FOB destination keeps it with the seller until delivery. Whoever owns the goods in transit carries the risk and files any damage claim.
Does FOB destination mean the seller pays shipping?
Not by itself. FOB sets ownership. Who pays the carrier is set by the freight terms: prepaid, collect, or prepaid and add.
Which FOB term should I use?
It is a commercial choice between you and your customer or supplier. Agree it on the purchase order, then put the matching terms on the bill of lading.
Booking the freight either way?
Send the lane, the weight and the pallet count and we quote it, prepaid or billed to the party your terms name.