FCA (Free Carrier)

FCA (Free Carrier)

Incoterms, also known as international commercial terms, are set to eliminate or decrease confusions and conflicts between buyers and sellers in international trade and to facilitate the trade and commerce process globally. Incoterms were created by the International Chamber of Commerce (ICC) in 1936 and since then, they are updated on a regular basis to suit changing trade trends.
EXWFCACPTCIPDAPDPUDDPFASFOBCFRCIF
Free CarrierCarriage Paid ToCarriage Insurance Paid ToDelivered at PlaceDelivered at Place UnloadedDelivered Duty PaidFree Alongside ShipFree On BoardCost & FreightCost, Insurance & Freight
Charges/FeesEx Works
At a named place, the seller transfers the goods to the buyer; the buyer is responsible for all risks.1.) when seller loads goods to buyer’s carrier or 2.) when goods are at the buyer’s disposal & ready for unloading at a named placedwhen the goods are handed over to the seller’s nominated carrier at a named placewhen the goods are handed over to the seller’s nominated carrier at a named placewhen the goods are placed at the buyer’s disposal at a named place or agreed point within that placewhen the goods are delivered and unloaded at a named place or agreed point within that placewhen the goods are placed at the buyer’s disposal at a named place or agreed point within that placewhen goods are alongside the vessel nominated by the buyer at named portwhen goods are on board the vessel nominated by the buyer at named portwhen the goods are on board the vessel nominated by the seller at originwhen the goods are on board the vessel nominated by the seller at origin
Risks Transfer
Commercial InvoiceSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Packaging & QCSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Loading & DeliveryBuyerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Export Duty & TaxesBuyerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Origin Terminal HandlingBuyerBuyerSellerSellerSellerSellerSellerBuyerSellerSellerSeller
Cargo InsuranceNegotiableNegotiableNegotiableSellerNegotiableNegotiableNegotiableNegotiableNegotiableNegotiableSeller
Carriage ChargesBuyerBuyerSellerSellerSellerSellerSellerBuyerBuyerSellerSeller
Destination Terminal HandlingBuyerBuyerSellerSellerSellerSellerSellerBuyerBuyerBuyerBuyer
Delivery to DestinationBuyerBuyerSellerSellerSellerSellerSellerBuyerBuyerBuyerBuyer
Unloading at DestinationBuyerBuyerBuyerBuyerBuyerSellerBuyerBuyerBuyerBuyerBuyer
Import Duty & TaxesBuyerBuyerBuyerBuyerBuyerBuyerSellerBuyerBuyerBuyerBuyer
Incoterms 2020
FCA

The FCA Incoterm, or “Free Carrier,” specifies that the seller must deliver the goods to the buyer’s selected carrier at a certain agreed-upon location mentioned in the sales contract, ready for export. A specific port or a carrier’s hub might be this place.

All customs charges and dangers are also the seller’s responsibility. Once the cargo has been delivered to the buyer’s preferred location, the risk is passed from the seller to the buyer. FCA is the ideal Incoterm for containerized freight due to the obvious risk transfer point.

The FCA Incoterm is adaptable and can be applied to any mode of transportation. In the contract of sale or shipment, the buyer must precisely specify the exact place of delivery.

Seller’s Responsibility Under FCA

  • Delivery of goods
  • Preparing invoice and related documents
  • Packaging and marking
  • Preparing licenses and customs documents
  • Transportation in the country of origin
  • Customs charges and handling fees in the country of origin
  • Insurance
  • Proof of delivery

Buyer’s Responsibility Under FCA

  • Payment of goods according to the agreed-upon contract
  • Unloading the goods at the point of delivery
  • Loading chrages
  • Import formalities, charges and duties
  • Transportation in the destination country

Cargo Insurance in CIF

The seller is contractually obligated to provide insurance for the goods’ transportation under CIF. Along with CIP, CIF specifies that the seller must provide the cargo with insurance.

In general, buyers prefer the CFR Incoterm if they can obtain higher cargo insurance coverage. This is due to the fact that, unlike CIF, insurance is not a seller’s responsibility under CFR and can be obtained by the buyer as well.