What does FOB stand for in shipping contracts?

In shipping contracts, FOB stands for "Free on Board." This term is critical in international trade as it delineates the point at which the responsibility and ownership of goods transfer from the seller to the buyer. Specifically, under FOB terms, the seller is responsible for the goods until they are loaded onto the transport vessel. Once the goods are on board the ship, the liability shifts to the buyer, who assumes responsibility for the shipping costs and risks thereafter.

Understanding FOB is essential for both parties involved in a shipping agreement, as it helps clarify who bears the costs and risks associated with the transportation of goods at various stages of the shipment process. A clear grasp of these terms helps prevent disputes related to liability and expenses during transit.

The other choices—Freight on board, Fast on board, and Fixed on board—do not accurately reflect the established terminology used in shipping contracts and thus lack the specific legal implications associated with FOB.