مهدی کاوه
Author
Mehdi Kaveh
FCA | Free Carrier

FCA | Free Carrier

Published at 2020-06-13


FCA | Free Carrier

FCA (named place) INCOTERMS 2020

FCA means the seller delivers the good in either of the two following ways:

  • If the named place, is the premises of the seller, the seller delivers the goods when the goods are loaded to the vehicle arranged for by the buyer and the seller has to clear the good for export.
  • If the named place is anywhere other the premises of the seller, the seller delivers the goods on the vehicle provided by the seller, ready for unloading by the anyone nominated by the buyer to take delivery of the goods, at the named place, and cleared for export by the seller. In other words, the seller loads the goods to a vehicle at his/her warehouse and sends the goods to the agreed upon location (named place) and clears the goods for export, but does not have to unload the goods.

In either of the above two scenarios, at that location and having met the above mentioned required conditions, the risk is delivered from the seller to the buyer and all the expenses are on the account of the buyer afterwards.


    What you really need to watch for:

  • This terms can be used for any mode of transportation.
  • It is highly recommended that both parties define the location as precisely as possible. If for example there are 3 different ports in a city, the name of the port should be exactly mentioned. The location named in the FCA rule, is where the risk is transferred from the seller to the buyer. This is also the location from where the costs are on the buyer's account.
  • If the parties do not agree on the exact point within the named place of origin which we call "location" here, it means they have agreed to leave it up to the shipper to choose the exact location where he/she thinks best fits the requirement of the delivery and it can expose the buyer to probable unnecessary risk as it might be a location which can increase the risk of loss or damage to the goods.
  • The shipper is responsible to carry out export formalities in the country of origin, however, the seller is not responsible to take care of transit customs procedures required for the consignment to move through 3rd party countries.
  • It is usually an LC requirement that the seller presents an On-Board BL to the bank, however, in FCA, the goods are handed over to the transport service provider before loading to a vessel which means an On-Board BL in not available in FCA when the goods are handed over to the transport service provider. In Incoterms 2020, the buyer is required to ask the transport service provider to issue an On-Board BL before loading onto a vessel, however, the transport service provider can refuse to issue such a BL owing to responsibilities in brings about. This mention in Incoterms 2020, is meant to be a cooperation between the buyer, the seller and the transport service provider.
  • When it is intended to put the least responsibilities on the seller's shoulder and highest one on the buyer's, EXW is the term, however, it is strongly recommended to use EXW with care and it can cause unnecessary risk for the buyer and instead use FCA. The reason is, in EXW, the seller is not responsible for loading and also export clearance and they are both very natural to be carried out by the seller. For more details, please check out the EXW rule details.


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