The FCA delivery terms are one of the most widely used methods in exports. This method is highly advantageous for both the seller and the buyer as it clearly outlines the responsibilities of both parties.
FCA delivery terms are among the international transport terms approved by Incoterms. Incoterms are recognized by the International Chamber of Commerce (ICC). Therefore, FCA is a global delivery model.
The answers to all the questions you have about FCA are waiting for you in the rest of our article.
What is the FCA Delivery Term?
FCA stands for Free Carrier. It is a trade term indicating that the seller is responsible for delivering the goods to a destination specified by the buyer.
The destination is usually an airport, shipping terminal, warehouse, or another location where the carrier operates. The seller includes the shipping costs in their price and assumes the risk of loss until the carrier takes delivery of the goods. At this point, all responsibility transfers to the buyer.
What Are the Main Advantages of the FCA Delivery Term?
The FCA delivery model has many prominent advantages for shippers. We can list these advantages as follows:
• FCA is a trade term requiring the seller of the goods to deliver those goods to a designated airport, shipping terminal, warehouse, or another carrier location specified by the buyer.
• The seller includes the shipping costs in their price and assumes the risk of loss until the carrier takes delivery of the goods.
• After the seller delivers the goods to the carrier, the buyer assumes all responsibility for the goods.
• As part of the transfer of responsibility, the seller is only responsible for delivery to the specified destination but is not required to unload the goods.
How Does the FCA Delivery Term Work?
Buyers and sellers can use FCA shipping terms to define any shipping point, regardless of the number of transport modes involved in the shipping process.
The seller is obligated to safely transport the goods to the location requested by the buyer. The carrier can be any transportation service such as a truck, train, boat, or airplane.
Once the seller delivers the goods to the agreed port or zone, responsibility for the goods transfers from the seller to the carrier or buyer. As part of this transfer of responsibility, the seller is only responsible for delivery to the specified destination.
Under FCA shipping terms, the buyer does not have to deal with export details and licenses because this is the seller's responsibility. However, the buyer must arrange the shipping. Once the goods reach the carrier and ownership transfers to the buyer, the goods become an asset on the buyer's balance sheet.
What Are the Obligations of the Seller and Buyer in the FCA Delivery Term?
The seller and buyer obligations determined by Incoterms for FCA are as follows:
Seller's Obligations:
• Goods, commercial invoice, and documents
• Export packaging and marking
• Export licenses and customs formalities
• Pre-carriage to the terminal
• Delivery to the specified delivery location
• Cost of pre-shipment inspection
• Proof of delivery
Buyer's Obligations:
• Payment for the goods at the price agreed upon in the sales contract
• Unloading from the incoming transport vehicles
• Loading charges
• Main carriage
• Discharge and subsequent transport
• Import formalities and duties
• Cost of pre-shipment inspection (for import clearance)
What is the Difference Between FCA and FOB?
FCA and FOB are shipping terms used in different modes of transport. FOB delivery applies only to sea shipments and occurs when the cargo is loaded onto a vessel.
The seller is responsible for goods delivered from the warehouse to the water vessel.
Under FCA, many more modes of transport are permitted. The supplier is generally obligated to issue an export declaration once the goods are loaded onto a buyer's vehicle.
What is the Difference Between FCA and DDP?
Under DDP shipping terms, a seller must pay the shipping costs. In addition, the seller generally assumes all risks and responsibilities associated with transporting the goods until the buyer takes delivery of them. Since the carrier is designated by the buyer, FCA shipping terms are typically paid for by the buyer.
Who Pays for an FCA Shipment?
Under FCA shipping terms, the buyer generally pays the shipping cost as they are the party responsible for nominating the carrier to be used.
Who is Responsible for Export Customs Clearance Under FCA?
Under FCA shipping terms, the seller is responsible for export taxes, duties, and customs. The buyer is responsible for importing the products.
