What is Free on Board (FOB)?

FOB is an acronym for “free on board”. In the US FOB is commonly used when shipping goods to indicate who pays loading and transportation costs, and/or the point at which the responsibility of the goods transfers from shipper to buyer. When the title is transferred and who has physical control of the goods are important questions that need to be answered in the supply and funding chain. FOB is obviously a critical variable for any Receivable Factoring or PO Funding transaction involving shipped goods.

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