5 Essential Notes about: Free Carrier (FCA) Incoterms
Free Carrier (FCA) means that the seller delivers the goods at its own premises or another named place to the buyer or carrier or any other person nominated by the buyer. This delivery place is in the seller country and usually its premises. So a difference between this term and Ex Works (EXW) is the export formalities that in FCA is for the account of the seller with all costs and risks.
1. What is the main differences between Free Carrier (FCA) and Ex Works (EXW)?
– There are two main differences. The first one is that in FCA the seller is obliged to clear the goods for export, at its own costs and risks. The second difference is about the loading the goods on collecting vehicle.
2. Should the delivery place be specified in Free Carrier (FCA)?
– It is highly advisable to specify as clearly as possible the point within the named place of delivery, as the risk passes to the buyer at that point.
– If no specific point is specified, the seller may select the point that best suits to deliver.
3. Is the seller responsible for loading goods at any named place?
– No. It depends on the named place for delivery as below:
a) if the named place is the seller’s premises, the seller must loads the goods on the means of transport provided by the buyer.
b) In any other case, the seller must place the goods at the disposal of the carrier or another person nominated by the buyer on the means of transport ready for unloading.
4. How the risk of the shipment is transferred in Free Carrier (FCA)?
– The buyer bears all risks of loss of or damage to the goods from the time they have been delivered.
– If a) the buyer fails to notify the nomination of a carrier or another person or to give notice to the seller;
or b) the carrier or person nominated by the buyer fails to take the goods into its charge, then, the buyer bears all risks of loss of or damage to the goods:
(i) from the agreed date, or in the absence of an agreed date,
(ii) from the date notified by the seller within the agreed period; or, if no such date has been notified,
(iii) from the expiry date of any agreed period for delivery,
“provided that the goods have been clearly identified as the contract goods”.
5. How and When the Buyer must notice the seller?
– The buyer must notify the seller of:
a) the name of the carrier or another person nominated within sufficient time as to enable the seller to deliver the goods in accordance with that article;
b) where necessary, the selected time within the period agreed for delivery when the carrier or person nominated will take the goods;
c) the mode of transport to be used by the person nominated; and
d) the point of taking delivery within the named place.
To read the full obligation of the seller and the buyer in FCA Incoterms read the book “ICC Guide to Incoterms 2010”
Other useful links:
Incoterms: Shipping Guide Every Trader Must Know