The information provided here is part of Export Import Training course online
FCA Terms of Delivery, a simplified tutorial.
One of many email messages receiving to me is a request of writing articles on Inco terms in simple and easy to understand. Here you can learn about FCA term of shipping delivery in simple explanation.
FCA means Free Carrier, introduced as per international commercial terms in 2010. FCA is used for both air and sea transaction. FCA terms of delivery also can be used for inland movements of shipments. Normally the term FCA should be followed by a named location.
FCA terms has mainly been designed to meet the new generation requirements of multimodal transport, commonly used on container transport movement as RO/RO (roll on – roll off) used by trailers and ferries. However, if the supplier of goods can not undertake the export formalities either directly or indirectly, FCA terms are suited for such sellers.
In FCA terms of delivery, the export cleared goods are delivered by the seller to the carrier at the said named and defined location mentioned in the contract. From that point of location, the expense up to buyers premises is paid by the buyer. Please note, the terms ‘export cleared goods’ does not mean that the goods were cleared by carrying out export formalities either directly or indirectly.
The term FCA has been derived from the basic principle of FOB terms, except some changes in obligation of seller on delivery terms that the fulfillment to deliver goods ends at the point of location mentioned in FCA terms, and not up to the main carrier used for final destination.
Normally, the seller’s assistance is required under FCA terms to act on behalf of buyer at buyer’s risks and expenses, especially under the shipments at dry ports where in rail transport and air transport involve. In such cases, apart from the seller, the buyer manages with the help of a nominated freight forwarder or his other representative.
In an FCA terms, who decides carrier of goods? Can the seller deliver goods to the carrier which he decides?
As per FCA terms, the right to finalize the carrier of goods is vested with the buyer. The seller can deliver goods to the buyer designated carrier only.
Who pays transportation on FCA terms of delivery?
Since the carrier is nominated by the buyer, the cost of transportation under FCA terms is paid by the buyer. The seller arranges to load the goods to the buyer’s nominated carrier.
Who pays insurance under FCA terms of delivery?
Since the risk of goods is with the buyer under FCA terms from the point of delivery by the seller, the responsibility to arrange insurance is with the buyer of goods.
When is FCA terms opted commonly?
FCA terms are commonly used on container transport movement as RO/RO (roll on – roll off) used by trailers and ferries. If the buyer can not carry out the export formalities, either directly or indirectly, FCA terms are opted in such business transactions also.
What would be the location, if no place has been mentioned in FCA terms?
In a FCA terms of delivery, if no location has been mentioned, the seller may choose the location where the buyer’s nominated carrier can take the materials into their custody.
Detailed articles about Inco Terms of Delivery under export and import of International business have been mentioned in separate category – INCO TERMS – in this web site. You can click here to read.
I hope, I have explained the FCA terms of delivery in simple and easy to understand mode. Do you have different thought on FCA terms of delivery. Comment below:
The above information is a part of Import Export Training course online
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