What is FOB and FOR?

Answer 1

I've seen a like of bizarre answers for the question "What is F.O.B.?" or "What is F.O.B. pricing?" Most are so wrong that I wonder if they are jokes.

F.O.B. means Free On Board. This pricing term indicates that the cost of the goods, including all transportation and insurance costs from the manufacturer to the port of departure, as well as the costs of loading the vessel are included in the quoted price.

This means that the seller has to bear all costs and risks of loss of or damage to the goods to that point and the buyer has to bear all costs and risks of loss of or damage to the goods after that point.

Example: Assume I'm in Los Angeles, CA and I want to buy something from Fresno, CA to send to Honolulu. If the terms are FOB Long Beach, then the seller in Fresno pays for all costs to get the goods to Long Beach. Once they are in Long Beach, I am responsible for all further costs. I have to pay to ship it to Honolulu. If the goods are damaged or stolen BEFORE they get to Long Beach, it's the seller's responsibility to fix or replace them. Once I get them in Long Beach, the goods are mine. If they are lost, damaged or stolen between Long Beach and Honolulu, it's my loss (that's why the seller has insurance for the 1st part of the trip - to Long Beach - and I take out insurance for the trip to Honolulu).