FCA - Free Carrier

What is the FCA Incoterm (Free Carrier)

The FCA Incoterm is one of those that can be used regardless of the mode of transport. It requires the seller to deliver the goods at the buyer’s chosen carrier, the location of which is stipulated in the contract of sale. Usually, the location is a carrier’s hub or a particular port.

Until the goods are delivered to the specified location, the seller bears all risks, including the responsibility to settle customs costs. The FCA Incoterm identifies a clear point when the risk is transferred, which makes it one of the few Incoterms that are suitable for containerized cargo.

Obtaining insurance is not a mandatory requirement under the FCA Incoterm. However, to insure the goods and the ocean freight portions they are responsible for, it’s recommended that buyers and sellers obtain insurance.

The Seller’s Obligations Under the FCA Incoterm

• Deliver the goods and the required documents
• Checking, packaging, and marking
• Transport-related security requirements
• Bear all risks of loss of or damage to the goods until delivery
• Customs handling fees at origin
• Export clearance
• Charges at origin
• Usual proof to the buyer that the goods have been delivered or the carrier has failed to take the goods
• No obligation to make a contract of carriage
• No obligation to obtain insurance.

The Buyer’s Obligations Under the FCA Incoterm

• Pay for the goods
• Bear all risks from the time the goods have been delivered
• Contract of carriage
• Notify the seller of the name of the carrier or person nominated to receive the goods, the time that the goods will be taken, the mode of transport, and the point where the goods should be delivered
• Transit and import clearance
• Customs handling fees at destination
• Duties and taxes
• No obligation to obtain insurance

What Does the Seller Pay For Under the FCA Incoterm?

• All costs relating to the goods until they have been delivered
• Costs of providing usual proof that the goods have been delivered
• Duties and taxes

What Does the Buyer Pay For Under the FCA Incoterm?

• All goods relating to the goods from the time they have been delivered
• Duties and taxes
• Costs incurred in case of failure to nominate a carrier or another person, or the failure of the nominated carrier or person to take the goods

FCA Can Be an Alternative to EXW

There are instances when the FCA Incoterm can be used as an alternative to the EXW or Ex Works Incoterm.

Under EXW, the seller is only responsible for getting the goods ready for pick up but does not hold the responsibility for loading the goods. On the other hand, FCA obligates the seller to deliver the goods at a specified address, which removes the burden of arranging loading services on the part of the buyer.

Under FCA, the shipper is in charge of the cargo, making it more ideal for buyers to use as an alternative to EXW.