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

In a scenario governed by FOB (Free on Board) destination with prepaid freight, the responsibility for damages during shipping falls to the supplier until the goods reach the destination. Since the freight is prepaid, the supplier has already taken on the cost, including the associated risks during transit.

In this context, the receiver is charged for shipping as part of the invoice, indicating that the supplier maintains ownership and liability for the goods until they are delivered to the receiver's location. If any damage occurs during transportation, it is the supplier who retains the right to file a claim with the shipping company for compensation related to those damages. This arrangement protects the receiver from the financial burden of damages that occurred prior to their possession of the goods.

This structure contrasts with scenarios where the receiver might have to assume liability for damages during transit under different shipping terms, or where claims are managed directly by the shipping company without involvement from the supplier. Therefore, the choice is accurate because it aligns with the principles of FOB destination terms and the responsibility assumed by the supplier in that arrangement.