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What Is Free Carrier (FCA)?
Let me explain Free Carrier (FCA) directly to you: it's a trade term where I, as the seller, am responsible for delivering the goods to a destination you, the buyer, specify. This destination is usually an airport, shipping terminal, warehouse, or another spot where the carrier operates.
I include the transportation costs in my price and take on the risk of loss until the carrier gets the goods. Once that happens, you assume all responsibility.
Key Takeaways
Understand this: Free Carrier means I, the seller, must deliver the goods to an airport, shipping terminal, warehouse, or other carrier location that you specify. I cover the transportation costs in my price and handle the risk until the carrier receives them. After I deliver to the carrier, you take over all responsibility for the goods. As part of this transfer, I'm responsible for getting the goods to that location, but I'm not required to unload them.
How Free Carrier (FCA) Works
You and I can use FCA shipping terms for any transportation point, no matter how many modes are involved in the shipping process. The point has to be in my home country, though. It's my duty to transport the goods safely to that facility. The carrier could be a truck, train, boat, or airplane—any transportation service.
The liability for the merchandise shifts from me to the carrier or to you when I deliver the goods to the agreed location. I'm only responsible for the delivery to that spot as part of the liability transfer. I'm not obligated to unload the goods, but I might need to ensure they've been cleared for export if the destination is on my premises.
With FCA terms, you don't have to handle export details and licenses—that's my job. You must arrange the transport, however. Once the goods arrive at the carrier and the title transfers to you, they become an asset on your balance sheet.
Important Advice
I recommend that if you're involved in international trade, you consult with a legal professional like a trade attorney before using any trade term in a contract.
FCA Incoterms
Contracts for international transportation often include abbreviated trade terms that detail shipment specifics, such as delivery time and place, payment, risk transfer point, and who pays for freight and insurance.
The most common ones are Incoterms, which are internationally recognized standards from the International Chamber of Commerce (ICC). They're similar to domestic terms like the Uniform Commercial Code, but interpretations can differ slightly.
Free Carrier (FCA) is a standard Incoterm, recognized since 1980 and revised every ten years, serving as instructions for delivery terms.
Fast Fact
You can purchase the Incoterms rules, established by the ICC, via their website.
Example of FCA
Under FCA, I deliver the goods to the destination you name. I hold responsibility until they arrive there, and you handle loading for transport.
For instance, suppose I'm Susan, the seller, shipping to you, Bob, under FCA terms. You choose a shipper you've used before, and I agree. It's my job to get the goods to that shipper. Once I do, all liability passes to you.
What Is the Difference Between FCA and FOB?
FCA and FOB are shipment terms for different transports. FOB applies only to sea shipments, where loading onto the vessel is my responsibility as the seller. FCA allows many transport types, and loading is your responsibility as the buyer. I usually have to issue an export declaration once goods are on your vehicle.
What Is the Difference Between FCA and DDP?
Under DDP, I pay for transportation costs and hold all risks until you receive the goods. With FCA, you usually pay since you nominate the carrier.
Who Pays for FCA Shipping?
You, the buyer, often pay for the transportation under FCA, as you're responsible for choosing the carrier.
Who Is Responsible for Export Clearance Under FCA?
I, the seller, handle export duty, taxes, and customs clearance. You manage importing the items.
The Bottom Line
Under FCA terms, I'm responsible for pre-carriage to a terminal, delivery to the agreed destination, and proof of delivery. I also cover export packaging, licenses, and customs formalities. You pay for the goods and handle the main transportation, plus loading charges, import duties, taxes, and formalities.
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