Final answer:
The title of goods and risk of ownership pass to the customer under FOB shipping point once the goods are handed over to the carrier. The buyer becomes responsible for any damage or loss during transit and must be aware of this to arrange necessary insurance.
Step-by-step explanation:
Under FOB (Free On Board) shipping point, the title of goods and the risk of ownership pass to the customer as soon as the goods are shipped. This means that once the goods leave the seller's premises and are handed over to the carrier, the buyer assumes responsibility for any risks during transit. As a result, the buyer needs to bear all costs related to damage or loss during shipping. It's essential for the buyer to be aware of when the title transfers because from that point on, they are responsible for the goods. It is prevalent in international trade where the buyer might need to arrange insurance for the transportation of goods.