FCA - Free Carrier

FCA (Free Carrier) defines the responsibilities and obligations of the buyer and seller in an international trade transaction. Under FCA, the seller fulfills their obligation by delivering the goods to a named place, where they are handed over to the carrier or another party designated by the buyer.

Key Aspects of FCA (Free Carrier):

1.Seller’s Responsibilities:
•Delivery: The seller must deliver the goods to a named place, which could be their premises, a transport hub, or another location specified in the contract. This place is agreed upon by both parties.
•Loading: If the named place is the seller’s premises, they are responsible for loading the goods onto the buyer’s carrier. If the named place is elsewhere, the seller is not responsible for loading the goods but must deliver them ready for transport.
•Export Formalities: The seller is responsible for export clearance and paying any export duties or taxes associated with the goods.
2.Buyer’s Responsibilities:
•Transport: The buyer arranges and pays for the transport of goods from the named place. This includes selecting the carrier and managing the logistics from the point where the seller delivers the goods.
•Import Formalities: The buyer is responsible for import clearance, including handling and paying for any import duties and taxes at the destination.
•Risk Transfer: Risk transfers from the seller to the buyer once the goods are delivered to the carrier or the named place.
3.Implications for the Buyer:
•Control over Transport: The buyer has control over the transportation process from the named place. This can be beneficial for coordinating logistics and cost management.
•Risk Management: The buyer assumes risk once the goods are handed over to the carrier or delivered to the agreed place. The buyer must manage the transportation and any associated risks from that point onward.
•Costs: The buyer bears the cost of transport from the named place, as well as any import duties and taxes.
4.Implications for the Seller:
•Limited Responsibility: The seller’s responsibility is limited to delivering the goods to the agreed place and handling export formalities. They are not responsible for the cost of transportation beyond that point or for import duties at the destination.
•Loading: If the delivery point is the seller’s premises, the seller must handle loading the goods. If not, they only need to ensure the goods are ready for pickup by the buyer’s carrier.

Example:

A company in the UK sells electronic components to a buyer in Japan under FCA terms. The seller’s responsibility is to deliver the components to a designated port or transport hub in the UK. The buyer arranges for the transport from this location to Japan, handles all logistics, and takes on the responsibility for import duties and clearance upon arrival in Japan.

Conclusion:

FCA (Free Carrier) is an Incoterm that outlines a balanced distribution of responsibilities between the buyer and seller. The seller is responsible for delivering the goods to a named place and handling export formalities, while the buyer takes on the cost and responsibility for transport from the named place, including import duties and risks. This term provides flexibility and allows both parties to manage their respective logistical responsibilities effectively.