CIP Vs. FCA, A comparison under Inco terms 2020

Difference between FCA and CIP as per Incoterms 2020

Free Carrier to a named place FCA   and Carriage Paid To a named destination

Here, let us distinguish between FCA and CIP. 

Usually under FCA, named place is in Seller’s country where under CIP terms, the named place is in Buyer’s country.  

Under FCA terms,   when goods reached at the named place at Seller’s country, the seller’s responsibility  of costs and risks on movement of goods transfers to the buyer.  However, under CIP terms, the seller’s responsibility of cost ends when goods reached at the named place in buyer’s country.  However, under CIP terms, the risk transfers to the buyer from seller immediately up on the goods delivered to the main carriage.  So under CIP, costs and risks do not move equally from seller to buyer, compared to FCA.

Under CIP, the main carriage is undertaken by the seller.  But under FCA, the buyer is responsible for the costs and risk of main carriage.  So the control over main carriage, freight selection and export data are with the exporter under CIP terms where under FCA, such advantages lacking with the Seller.

When distinguishing between CIP and FCA, we can note that under CIP delivery rules, ICC clearly mentions that the Seller is responsible to arrange Insurance for movement of goods where under FCA terms  Incoterms 2020 is silent about the responsibility on insurance. 

*FCA diagram shown above is meant for movement of goods for exports,  wherein named place is Port of loading.   FCA delivery term means loading goods to the means of transport provided by the buyer or placing them at the disposal of the buyer’s carrier.  Read the separate post about FCA in this website for better understanding.

Detailed posts about FCA and CIP may be read by clicking the below links to understand the difference easily:

CIP  Carriage and Insurance Paid To

FCA  Free Carrier

Hope, the above information about difference between FCA and CIP helps you.  You may also share your experience about the above subject - distinguish between CIP and FCA below by commenting.

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