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November 14, 2021 12:52 pm by admin

Free carrier – FCA



FREE CARRIER - FCA- INCOTERMS-2020

Under the  Free Carrier (FCA) 2020 Incoterms, the transfer of risk happens in two ways depending on the agreed named place of delivery. (A2)

 

Case number one : The named  place is in the seller’s premises

 

In this scenario, the transfer of risks takes place when the goods have been loaded on the carrier’s vehicle

 

Case number two : Goods delivered to the carrier

 

Here the transfer of risks happen when both the goods have been loaded on the carrier’s vehicle or even in the seller mean of transport if he decides to arrange delivery on his own(A3).

 

However, the transfer of risks is deemed to be effective when goods are delivered on the vehicle and at the named place ready to be unloaded. In a nutshell, the unloading process is under the buyers ‘responsibility which is to say that beyond this point, risks and costs are transferred to him.

 

If no precise point of delivery has been determined, the seller can deliver the goods anywhere in the named place based on what suits him best (A2). Needless to say that in order to avoid potential conflicts, it is in the involved parties’ interest to be as specific as possible regarding both the named place and the point of delivery.

 

In addition, a period within which the delivery should take place is agreed and it is under the buyer’s responsibility to select a time within this period for taking delivery of the goods.

 

Bill of Lading Issuance

 

When the seller needs to present a bill of lading due to a letter of credit requirement, two options are available . (A6)

 

Requesting from the buyer that he chose a carrier which agrees to issue a bill of lading to the seller as soon as the goods have been handed over to him (A6)

 

Requesting that the bill of lading issued by the carrier upon delivery, states that goods have been received for shipment. In this case both parties must make sure that the letter of credit is in line with this prerequisite.(A6)

 

Overall the Seller is liable for:

 

  • Providing an invoice that reflects the sales contract terms.(A1)
  • Goods that have been ordered must have an adequate packaging for transport (A8)
  • Providing documentation that might be needed for arranging transport by the seller (Ex: Provide assistance in respect to Export and Import formalities as well as in respect to security clearance  documentation) (A4,A7) Export costs must be paid for by the buyer.
  • Providing documentation to the seller for insuring the goods if requested (A5)
  • Providing proof of delivery to the carrier (A6) based on the instruction that buyer gave to the carrier and as agreed with the seller
  • The seller is required to give notice that the goods have been delivered and conversely if the carrier fails to take delivery of the goods, he must inform to the buyer as soon as possible(A10)

 

Overall the Buyer must:

 

  • Pay for the goods ordered as agreed in the sales contract.(B1)
  • Take reception of the goods when they are delivered and arranging the unloading process. (B2)
  • Unless the seller arrange himself the pre-carriage, the buyer must nominate and pay a carrier for taking delivery of the goods as agreed in the contract sale . Note that beyond the agreed date,  time and place, the risks are completely transferred to the buyer.(B3)
  • When it has been agreed, the carrier will release  transport document such as a bill of lading or a document which states that the goods have been onboarded.(B4)
  • Provide assistance in respect to Export and Import formalities as well as in respect to security clearance  documentation) (B7) Import costs must be paid for by the buyer.
  • Overall, from the moments that the goods have been handed over to him , the buyer is liable for every ensuing costs
  • The buyer must communicate sufficiently in advance  the name of the carrier as well as the type of transport selected. Additionally, he must provide an approximative date and time regarding the delivery which should be within the timeframe period that have been agreed if such agreement exists.

 

 

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