"Free On Board" (FOB) is a shipping term used in international trade that indicates when the responsibility for goods transfers from the seller to the buyer. Under FOB terms, the seller is responsible for all costs and risks until the goods are loaded onto the shipping vessel at the designated port. Once the goods are on board, the buyer assumes responsibility for any further costs, including shipping and insurance. There are two main types of FOB: FOB Origin and FOB Destination. With FOB Origin, the buyer takes responsibility as soon as the goods leave the seller's premises. In contrast, FOB Destination means the seller retains responsibility until the goods reach the buyer's location. Understanding these terms helps both parties clarify their obligations in a transaction.