Freight Glossary
FOB Terms
FOB (Free On Board) terms define the point at which ownership and liability for a shipment transfer from the seller to the buyer, either at the origin (FOB Origin) or at the destination (FOB Destination). They determine who bears the risk and cost of freight. Under FOB Origin, the buyer owns the goods the moment they leave the seller warehouse and is responsible for filing any in transit claims.
Why it matters
FOB terms directly affect who files freight claims, who pays the carrier, and who absorbs loss or damage in transit. Getting them wrong in a contract can leave a shipper liable for costs they expected the other party to carry. A single misaligned FOB term on a $50,000 shipment can result in a total loss with no recovery path for the wrong party.
When to use it
Clarify FOB terms on every purchase order and sales contract, especially for high-value or high-volume shipments where ownership transfer and insurance responsibility are material. If you are a retailer receiving vendor shipments FOB Origin, confirm that your cargo insurance covers the full transit from vendor dock to your DC.
How Warp thinks about it
Regardless of FOB terms, Warp provides per-pallet pricing clarity so both buyers and sellers can accurately model freight cost into their supply chain economics. Warp drivers capture digital proof of delivery on every move, giving both FOB Origin and FOB Destination parties a documented handoff record.