Question

What is the difference between FOB destination and FOB origination?

1) The supplier retains ownership of the product until it reaches the destination in FOB destination, while the buyer takes ownership immediately upon shipment in FOB origination.
2) The buyer retains ownership of the product until it reaches the destination in FOB destination, while the supplier takes ownership immediately upon shipment in FOB origination.
3) FOB destination and FOB origination are the same and there is no difference in ownership.
4) Ownership of the product is determined based on the terms agreed upon by the buyer and supplier in both FOB destination and FOB origination.

Answer 1

FOB destination and FOB origination are terms used in international shipping to define ownership and responsibility for a product during transit.

Step-by-step explanation:

FOB (Free on Board) destination and FOB origination are both terms used in international shipping to define the point at which ownership and liability for a product transfers from the seller to the buyer.

In FOB destination, the seller retains ownership of the product until it reaches the buyer's specified destination. The seller is responsible for the cost and risk of shipping the product. The buyer takes ownership and responsibility for the product upon its arrival at the destination.

On the other hand, in FOB origination, the buyer takes ownership and responsibility for the product immediately upon shipment. The seller is only responsible for the cost and risk of getting the product to the agreed-upon point of origin.