FOB Shipping Point — what it means, in plain English
“FOB shipping point” means the goods become yours the moment they leave the seller’s location. From that point on, you own them, you pay the freight, and if they’re damaged or lost on the way, it’s your problem — not the supplier’s.
The opposite is FOB destination, where the goods stay the seller’s responsibility until they reach you.
FOB shipping point vs FOB destination
The whole term comes down to one question: at what point do the goods become yours?
Short version: FOB shipping point = the risk is yours earlier. That’s the version most China import orders use.
What FOB shipping point means for your money
If your purchase order says FOB shipping point (or an Incoterms FOB Chinese port), here’s the real-world impact:
- You arrange and pay the ocean/air freight from the origin port.
- You insure the goods in transit — the supplier won't.
- If a container is damaged or lost at sea, it's your loss (you file the insurance claim, not them).
- The goods are "yours" before you've ever seen them — which is exactly why a check before they ship matters.
A quick word on "FOB shipping point" vs Incoterms "FOB"
People use “FOB shipping point” two ways, and mixing them up causes real confusion:
- In US accounting, it describes who owns goods in transit (the point above).
- In Incoterms 2020, FOB (Free On Board) is a sea-freight rule where risk passes the moment goods are loaded onto the vessel at the named origin port.
Both mean the same thing in practice for an importer — risk moves to you at origin — but Incoterms pins the exact moment to “on board the ship.”
Frequently asked questions
Yes. Under FOB shipping point, you pay the main freight from the origin port and own the goods in transit.
You are. Risk passes to you at the origin, so transit damage is your loss to claim on your cargo insurance — which is why many buyers insist on a pre-shipment inspection first.
Almost. Both move the risk to the buyer at origin. The accounting term means at the seller’s shipping point; Incoterms FOB pins it to loaded on board the vessel.
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