It's called the "almost expert syndrome" (or AES -- don't Google it, I just made it up) and we all suffer from it from time to time. Here's a personal example: think of the last time you yelled at a referee at a football game for missing an " easy" call, and it turns out the ref was correct -- a little embarrassing? Sometimes we don't really know what we think we know.
Why does this matter? It matters because there are times when language really must be precise if we're to communicate properly. If we rely on what we think someone means, or we expect them to know what we mean without using the proper terminology, we open ourselves to misunderstanding, misleading expectations, and possibly higher costs. The issue of cost is especially important when it comes to freight.
So, for the good of us all, and using our own company as an example, here's a quick primer of the most popular Incoterms:
Goods are made available for pickup at our factory or warehouse and "delivery" is accomplished when the merchandise is released to your freight forwarder. You are responsible for making arrangements with your forwarder for insurance, export clearance and handling all other paperwork.
FOB (Free On Board)
FOB means that we use our freight forwarder to move the merchandise to the port or designated point of origin. Though frequently used to describe inland movement of cargo, FOB really refers to ocean or inland waterway transportation of goods. "Delivery" is accomplished when we release the goods to your forwarder. Your responsibility for insurance and transportation begins at the same moment.
FCA (Free Carrier)
In this type of transaction, we are responsible for arranging transportation, but we are acting at the risk and the expense of you, the buyer. Where in FOB the freight forwarder or carrier is the choice of the buyer, in FCA we (the seller) choose and work with the freight forwarder or the carrier. "Delivery" is accomplished at a predetermined port or destination point and you are responsible for insurance.
DAP (Delivered At Place)
DAP term is used for any type of shipments. We pay for carriage to the named place, except for costs related to import clearance, and assume all risks prior to the point that the goods are ready for unloading by you, the buyer.
DDP (Delivered Duty Paid)
DDP term tends to be used in inter-modal or courier-type shipments. Whereby, we are responsible for dealing with all the tasks involved in moving goods from the manufacturing plant to your door. It is our responsibility to insure the goods and absorb all costs and risks including the payment of duty and fees.
There is a great deal of information around regarding Incoterms, so for further explanation or to see a full list I recommend you contact your freight-forwarder. In the meantime, if you use the above information you may find a little simplicity in the complex world of international and domestic shipping. At least you'll be saying what you mean.
Source: Portions of this information was obtained via www.foreign-trade.com