FCA INCOTERM (Free Carrier) – Use and Meaning

What is FCA Incoterm (free carrier)

FCA Incoterm or “free carrier” stipulates that the seller must deliver the goods to be exported to the carrier selected by the buyer at a specific agreed place agreed in the sales contract. The location can be a specific port or operator’s hub.

The seller is also responsible for all customs fees and risks. The risk is transferred from the buyer to the seller only after the goods are delivered to the location chosen by the buyer. Considering the clear risk transfer point, FCA is a general rule for the interpretation of international trade terms recommended for containerized goods.

FCA Incoterm has many uses, regardless of the mode of transportation.

 

FCA insurance

According to FCA, buyers and sellers have no contractual obligation to purchase cargo insurance.

However, buyers and sellers usually get their own insurance policies to cover the part of the ocean they are responsible for. In addition, one party can also purchase coverage that covers the entire transportation process.

When negotiating insurance terms, make sure to specify its conditions in the sales contract.

 

FCA could be a good alternative for  EXW

In some cases, FCA Incoterm may be a good alternative to Ex Works Incoterm.

For EXW, the shipper is responsible for getting the goods ready for pickup at the origin, but not for loading. Some shippers will usually take the initiative to load the goods, but there is no guarantee.

As a buyer, without this guarantee, you will have to arrange your own loading service, and loading from another country/region is more troublesome. A good alternative is to have your goods shipped under the FCA and specify the pickup address, which is usually also called FCA (named location).

This is a good solution because transportation under the FCA makes the shipper responsible for loading the goods.