FOB for everything? Think again!

Many people that buy and sell products internationally use terms such as FOB irrespective of the mode of transport. This is WRONG!!! So what's the difference? INCOTERMS are generally believed to cover 1 area, that is where the ownership of the goods passes from the seller to the buyer. This affects what transport charges are borne by which party and when payment of the goods is due. But INCOTERMS also covers the liabilities (risk) of the buyers and sellers. If your supplier sells you a product on an FOB basis, then the ownership of the product passes to you once the goods cross the railing of the vessel. The only vessels that have railings are ships, boats or barges. Therefore, if your mode of transport is by air or truck, then you should use the term FCA. And if your buyer or seller doesn't know these terms, do yourself the favor and explain it to them.