Freight Terms

As of December 2000

There are two components to freight terms:

I. Ownership

II. Transportation costs

F.O.B. is the abbreviation for Free on Board. This means that the product will be placed on a mode of transport (carrier) without any loading costs and free of any encumbrances.

FRS FREIGHT TERM ABBREVIATIONS

Code	F.O.B. Point	Transportation Costs
DA	Destination	PPD/ADD (Prepaid & Added)
DC	Destination	Collect
DP	Destination	Prepaid
SA	Ship Point	PPD/ADD (Prepaid & Added)
SC	Ship Point	Collect
SP	Shipping Point	PPD (Prepaid)

OWNERSHIP DESIGNATION

Establishing ownership fixes responsibility for the product and determines who handles the claims that may result from accidents occurring before, during or after transport.

Origin OR Shipping Point OR Factory	Title or ownership passes to Tech at the point when the carrier accepts the product. The point of origin or shipping point is usually the vendor’s factory or warehouse.
Destination OR Tech	Title or ownership passes to Tech when the carrier delivers the product, in good condition, to the delivery point specified on the purchase order.

RESPONSIBILITY FOR TRANSPORTATION COSTS

Freight Prepaid & Added OR Freight Prepaid & Charged	Vendor pays the freight bill and adds that amount to their invoice.
Freight Prepaid OR Freight Prepaid & Allowed	Vendor pays the freight bill and DOES NOT charge back to the University.
Freight Collect	Tech pays the freight charges directly to the carrier.

FREIGHT TERMS CHART

Freight Terms	Ownership of Commodity	Payment of Transport Fees	Freight Claims
FOB Origin Prepaid & Added OR Prepaid & Charged	Title passes to Tech when carrier signs for product at shipping point	Vendor pays shipping costs and adds to Tech’s invoice	Tech pays vendor IN FULL and files claim with carrier to recover costs for damaged or lost merchandise.
FOB Origin Prepaid & Allowed	Same	Vendor pays shipping costs.	Same
FOB Origin Freight Collect	Same	Tech pays shipping costs directly to carrier	Same
FOB Destination Prepaid OR Prepaid & Allowed	Title passes to Tech when product is delivered in good condition	Vendor pays shipping costs	Vendor files any freight claims and replaces damaged merchandise at no additional cost to the University.
FOB Destination Prepaid & Added OR Prepaid & Charged	Same	Vendor pays shipping costs and adds it to Tech’s invoice	Same
FOB Destination Collect	Same	Tech pays shipping costs directly to the carrier	Same

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