Final answer:
The difference between Freight on Board (FOB) shipping point and FOB destination lies in the point at which the transfer of ownership and responsibility occurs in a shipment. FOB shipping point means that the buyer assumes ownership and responsibility for the goods being shipped once they leave the seller's shipping dock. On the other hand, FOB destination means that the seller retains ownership and responsibility for the goods until they are delivered to the buyer's specified destination.
Step-by-step explanation:
The difference between Freight on Board (FOB) shipping point and FOB destination lies in the point at which the transfer of ownership and responsibility occurs in a shipment. FOB shipping point means that the buyer assumes ownership and responsibility for the goods being shipped once they leave the seller's shipping dock. On the other hand, FOB destination means that the seller retains ownership and responsibility for the goods until they are delivered to the buyer's specified destination.
For example, if a buyer chooses FOB shipping point, they would be responsible for any damages or loss that occurs during transit from the seller's dock to the buyer's location. In contrast, if a buyer chooses FOB destination, the seller would be responsible for any damages or loss that occurs during transit to the buyer's specified destination.
It's important to note that the terms FOB shipping point and FOB destination have implications for who pays for shipping costs and insurance. When the terms are FOB shipping point, the buyer bears the transportation costs and insures the goods during transit. In the case of FOB destination, the seller covers the transportation costs and insures the goods during transit.