Certified Materials and Resource Professional Practice 2025 – All-in-One Guide to Exam Excellence!

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When equipment is damaged en route under FOB shipping point, who bears the cost?

The supplier, who pays for the shipping

The receiver, who is responsible for both shipping charges and claims

When equipment is damaged under FOB (Free On Board) shipping point conditions, the responsibility for risk transfer occurs at the shipping point. This means that once the seller ships the equipment and it leaves their location, the responsibility shifts to the buyer. Therefore, the receiver bears the cost associated with both the shipping charges and any claims related to damage that occurs during transit.

Under FOB shipping point terms, the seller is only responsible for the equipment until it is loaded onto the transport. At that point, the buyer assumes all risks, including damage. This understanding is crucial for both parties in managing their logistics and insurance needs. The receiver must ensure they are prepared to handle any damages that may arise during shipping, as their responsibility begins as soon as the equipment is shipped.

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A third-party inspector, if involved

The manufacturer of the equipment

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