Under FOB Destination terms, who bears the cost and risk until goods reach the destination?

• A. The manufacturer bears the cost and risks until the goods reach the destination.
• B. The designer bears all costs and risks.
• C. The buyer bears costs only after site delivery.
• D. The shipping company bears all risk.

Answer: (A)

FOB Destination assigns responsibility to the seller for both costs and risks until the goods arrive at the named destination. This means the manufacturer pays for freight (and any insurance if included) and bears the risk of loss or damage during transit up to the point of delivery at the destination. Only when the goods have reached and been delivered to the destination (typically the buyer’s site or receiving dock) does the risk transfer to the buyer. That’s why identifying the manufacturer as bearing costs and risks until arrival best fits FOB Destination. The buyer, shipping company, or designer do not carry those obligations under this term.