Dictionary of Procurement Terms

The point at which a title changes hands from the supplier to the buyer at the origin of the shipment. In this scenario, the buyer owns the goods in transit, assumes responsibility for carrier selection, and files any claims for damages incurred during this period. F.O.B. Origin does not address the responsibility for the cost of transportation (freight charges), which must be specified with the inclusion of additional language.

The point at which a title passes at origin, and the buyer pays the freight.

The point at which a title passes at origin, and the seller pays the freight and then collects the charges from the buyer by adding them to the invoice. Also known as Free on Board (F.O.B.) Origin, Freight Prepaid and Charged Back.

The point at which a title to the goods passes from the seller to the buyer at the point of origin, and the supplier pays and bears the freight expense. The buyer owns the goods in transit and files claims, if any.