FCA can be used for any form of transportation, such as air freight, ocean freight, road freight, and rail freight. This Incoterm offers flexibility to the buyer because he can arrange transport, often at a lower price than what his seller could offer. While the buyer assumes all risks and responsibilities once the goods have reached the point of export, FCA allows the buyer to take over after the shipment has been exported, which can be a lengthy and risky process for some products. Free carrier means that the seller delivers the goods to the carrier or another person, i.e. to the buyer at the seller`s premises or other designated place. The parties are well advised to indicate the point in the indicated place of delivery as clearly as possible, as the risk passes to the buyer at that time. The seller must complete all export formalities and the buyer carries out all import formalities. Free carrier is a trade term that requires a seller of goods to be responsible for delivering those goods to a destination specified by the buyer. When used in trade, the word “free” means that the seller is required to deliver the goods to a specific place for delivery to a carrier.
The destination is usually an airport, shipping terminal, warehouse or any other place where the airline operates. It could even be the seller`s business location. According to FCA, the seller is responsible for export customs clearance, trucking within the exporting country and delivering the goods to the agreed location in the seller`s country. The buyer is responsible for the unloading of the goods from the seller`s transport and for all transport from this point, including all road transport necessary to the port from the place of delivery, if any. In addition, the risk shifts from the seller to the buyer when the seller assumes responsibility for the goods. A carrier is any person or company that performs the transport, such as a shipping company, airline, transit company, railway or freight forwarder. The information provided here is part of the Export Import Online tutorial difference between FCA and FOB regarding the delivery of goods. How to distinguish FOB and FCA in terms of delivery? We have talked about FCA and FOB separately in this blog. I hope the content of these articles is easy to understand. Let me say in simple explanation to FOB Vs FCA.
FCA`s delivery terms were introduced into the conditions of international trade in 2010. The term FOB has been used for many decades, but after 2010, FOB shipping conditions were included in small groups. What is a plain language FOB term? Within a FOB delivery period, the seller delivers the goods on board the vessel at his own expense. The rest of the costs and the risk of transport to the final destination are borne by the buyer. In the case of a shipment for export, as soon as the goods are ready for export, the shipper arranges for the cargo to be transported to the port of loading after the necessary customs formalities. The goods shall be loaded onto the vessel at the expense of the exporter. This is the simple explanation of the terms FOB. Also read basic tips for exporters when entering into delivery terms on a FOB basis.
Who decides the carrier for FOB shipments? ]]> What are the FCA shipping conditions in the quick reference? With respect to FCA delivery, exported duty-paid goods are delivered by the seller to the carrier at the place specified and defined in the contract. Thus, the seller fulfills the obligation to deliver the goods to the place where FCA concludes contracts. From this place, the buyer must take responsibility. Within an FCA delivery time, the seller`s assistance is usually required by the buyer to deliver the goods to the contractual place at the buyer`s expense and risk. If the place where the goods are to be delivered has not been mentioned in the contract, the seller may arrange delivery of the goods to the place where the buyer`s carrier is available by mutually accepting them. Within an FCA delivery period, delivery of the goods may also take place at the seller`s premises if this has been mutually agreed between the buyer and the seller. In such transactions, however, ex-works terms are used. FCA terms are commonly used for container transport movements like RO/RO (Roll on – Roll off) used by trailers and ferries. If the buyer is unable to complete the export formalities directly or indirectly, FCA conditions will also be chosen for these transactions. I hope that the terms of the FCA are explained in an easily understandable way. In short, under FOB conditions, the seller completes all export formalities and delivers the goods to board the vessel fitted out by the buyer. However, in terms of FCA, the seller fulfills the obligation to deliver the goods once the goods have been loaded to the carrier designated by the buyer who is on board the main vessel prior to embarkation.
The goods shall be placed on board the vessel under FOB conditions, the performance by the seller of the obligation to deliver the goods terminating when the goods are loaded to the carrier at the place agreed in the FCA conditions. Read also FCA Term of Delivery, a simplified mode of transport on EX WORKS/FCA/CPT/CIP/DAT/DAP/DDP/FAS/FOB/CFR/CIF Detailed articles on Inco`s delivery terms under Export and Import of International Business have been mentioned in a separate category – INCO TERMS – on this website.