![]() ![]() It also outlines the seller’s obligations in delivering the goods to the carrier at the named place specified by the buyer. Typically, it is the moment the seller hands the goods over to the freight forwarder or carrier nominated by the buyer. The shipping policy for FCA clearly outlines where the risk of liability is transferred from the seller to the buyer. The seller is then free to tender the documents to the relevant bank to cash the credit. Once the goods are delivered to the carrier nominated by the buyer, the seller will receive a bill of lading to state that the goods have been delivered to the carrier, as dictated by the terms of sales. In that case, they are still responsible for loading the goods onto the carrier. Suppose the seller is responsible for arranging transport to the carrier at a location that is not a seaport or an airport, such as the forwarder’s warehouse. The liability for the goods transfers from seller to buyer when the goods are delivered to the carrier at the named place. Typically, there are usually three parties involved in every FCA transaction - the buyer, the seller, and the buyer’s carriage company or freight forwarder. Unlike other Incoterms such as CIF and FOB, the FCA Incoterm is not restrictive, and buyers can use it on any transport mode such as train, boat, truck, or aeroplane. As a result, they can shop for the best offer available or use a freight forwarder with whom they already have an established relationship. These include charges at the origin terminal and throughout the international transportation process. They must also arrange for the necessary import clearance and formalities once the goods arrive in the destination country.Īs the buyer must arrange for the transport of the goods, it is one of the most favourable shipping terms because the buyer has more control of all the costs associated with the shipping. Under the Free Carrier (FCA) Incoterm, the buyer assumes most responsibility as they have to arrange the freight transport and handle the shipping process to deliver the goods from the named place to the final destination. Understanding the Free Carrier (FCA) Incoterm Typically, the seller will factor in any transportation costs to deliver the goods to the named place in the price and assumes the risk of loss or damage until the carrier receives the goods. While the buyer is responsible for import clearance, the seller is still responsible for export clearance and taxes. The bill of lading allows the seller to communicate with any financial intermediaries that might need proof or a letter of credit. The responsibilities are transferred from the seller to the buyer at that point. The carrier will issue a bill of lading with an onboard notation as soon as the goods have been loaded onto the carriage vehicle, either in the warehouse or at a terminal port. However, the seller would still be responsible for loading the goods onto the carrier at their warehouse. In this case, the buyer would arrange a carrier to pick up the goods. ![]() Interestingly, the destination for the seller to deliver the goods is known as a “Named Place”, which can be an airport, a shipping terminal, a container terminal, the seller’s warehouse, or any location in the seller’s country specified by the buyer.Īdditionally, the Named Place can also be the seller’s premises. In international trade, the term “Free” means the seller has an obligation to deliver the goods to a named place to be transferred to the carrier, which the buyer arranges. ![]() It stands for “Free Carrier”, and it dictates that the seller of the goods is responsible for delivering said goods to a destination that the buyer requests.
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