What is FCA (Free Carrier)?

FCA (Free Carrier) is one of the Incoterms (International Commercial Terms) defined by the International Chamber of Commerce (ICC) used in international trade. It specifies the responsibilities of the buyer and the seller regarding the delivery of goods. Under the FCA term, the seller is responsible for delivering the goods, cleared for export, to the carrier or another person nominated by the buyer at the seller's premises or another named place.

Key Components of FCA

1. Place of Delivery: The seller delivers the goods to the carrier or another person nominated by the buyer at a specified location. This could be the seller's premises, such as a warehouse or factory, or another agreed place, such as a shipping terminal or logistics hub.
2. Transfer of Risk: The risk of loss or damage to the goods transfers from the seller to the buyer once the goods have been delivered to the carrier or nominated person at the named place.
3. Export Clearance: The seller is responsible for clearing the goods for export, including obtaining necessary export licenses and completing export customs formalities.
4. Transportation and Insurance: The buyer is responsible for arranging and paying for the main carriage (transportation from the named place to the final destination) and insurance from the point the risk transfers.
5. Documents and Communication: The seller must provide the buyer with all necessary documents to take delivery of the goods and assist with any information required for import clearance at the destination.

Seller's and Buyer's Responsibilities

Seller's Responsibilities

1. Packing and Marking: The seller must properly pack and mark the goods for transport.
2. Delivery: The seller must deliver the goods to the carrier or another nominated person at the agreed place.
3. Export Clearance: The seller must handle all export customs formalities and bear the costs associated with these processes.
4. Proof of Delivery: The seller must provide proof of delivery to the buyer, typically in the form of a receipt from the carrier.

Buyer's Responsibilities

1. Main Carriage and Insurance: The buyer must arrange and pay for the transportation from the named place and insurance if desired.
2. Import Clearance: The buyer must handle all import customs formalities and bear the costs associated with these processes.
3. Delivery Instructions: The buyer must provide clear instructions to the seller regarding the nominated carrier and the place of delivery.

Benefits of Using FCA

1. Flexibility: FCA allows for flexibility in terms of the delivery point, which can be at the seller's premises or another location agreed upon by both parties.
2. Clear Risk Transfer: The point at which the risk transfers from the seller to the buyer is clearly defined, reducing the potential for disputes.
3. Cost Control: Both parties have clear responsibilities regarding costs, allowing for better financial planning and control.

Conclusion

FCA (Free Carrier) is a widely used Incoterm that clearly defines the responsibilities of the buyer and seller in international trade. By specifying the point at which the seller delivers the goods to the carrier and transfers the risk, FCA provides clarity and reduces the risk of disputes. It offers flexibility in delivery locations and helps both parties manage their costs effectively. Understanding the intricacies of FCA is essential for businesses engaged in international trade to ensure smooth and efficient transactions.