Incoterms are standardized terms used within international trade to outline the exact delivery terms between a buyer and a seller. Incoterms summarize who is responsible for loading and unloading, delivery, payment and insurance. However, when the Free Carrier (FCA) term is selected, who is responsible?
FCA has become the preferred term over Free on Board (FOB), which was commonly used in the past. The FCA designation has grown in popularity primarily since FOB is only applicable to ocean freight and intended for charter type cargo.
With the FCA term, the seller delivers the cargo to a named place, whether it be an airport, marine terminal or another place where the carrier operates. A precisely named place of delivery is essential to avoid any discrepancies.
After the seller delivers the freight to the named place, the risk of loss is transferred to the buyer. The buyer assumes all risks and costs associated with delivering the goods to the final destination, including transportation costs and import customs fees.
The seller is responsible for:
Typically, the buyer will be responsible for:
The buyer and seller are not obligated to insure the goods under the FCA Incoterm. However, the critical topic of cargo insurance (link) should be outlined within the sales contract.
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