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Free Carrier (FCA)




Incoterms 2010

 

Free Carrier

Any type of transport mode, including Multimodal Transport

 Free Carrier Incoterms 2010

This Incoterms® rule is somehow similar to EXW in that, it represents a limited level of commitment.

Indeed, with the Free Carrier (FCA) Incoterms rule, the Seller has basically two obligations.

-Firstly, the Seller must take care of the export custom clearance formalities (export licence for instance) when applicable.

-The second obligation relates to the loading process.

Indeed, if the delivery takes place in the Sellers’ warehouse (or factory e.g.), the Seller must arrange the loading of the goods in the carrier’s vehicle (pre-carriage).

Alternatively, if it has been agreed that the delivery should take in any other named place (carriers ‘facility, e.g.), the Sellers will have to place the goods at the carrier’s disposal ready to be unloaded which is to say that in this case, the seller does not have to arrange the loading in the carrier’s vehicle.

It is worthwhile highlighting this point since in the first case, the transfer of risks takes place as soon as the goods have been loaded while in the second case, the transfer of risks to the buyer occurs as soon as the seller place the goods at the carrier’s disposal.

In each case the Seller has the obligation to provide the proof that the goods have been delivered to the carrier.

The Buyer pays for pre-carriage, main carriage and post carriage costs, Terminal Handling charges (depending on liner terms) and import custom clearance (Taxes, duties, Import licence, VAT etc.…)

Note that if the pre-carrier fails to take the goods at the agreed date, the buyer will be held accountable for any subsequent damage and cost.

Any pre-shipment inspection required by law in the seller’s country, is at the seller’s expense.

Note that the Seller must assist the Buyer for obtaining necessary documents required for organising transportation and insurance with the related costs at the Buyer’s expense.

Usual Documents required:

  • Commercial Invoice
  • Transport documents (forwarder’s certificate of receipt)
  • Export formalities (when applicable)

When should I use the Free Carrier (FCA) Incoterms rule?

Overall we can say that the Free Carrier (FCA) Incoterms rule is well adapted for containerised goods as well as in cases, where the Seller wants to limit the extent of his obligations in respect of international trade transactions.