What is FCA (Free Carrier)?

Free Carrier (FCA) is an incoterm that requires the seller to clear the goods for export and to either: deliver the goods to the buyer at the seller's premises or deliver the goods to the buyer at another named place. If delivery occurs at the seller's premises, or at any other location that is under the seller's control, the seller is responsible for loading the goods on to the buyer's carrier. However, if delivery occurs at any other place, the seller is deemed to have delivered the goods once their transport has arrived at the named place; the buyer is responsible for both unloading the goods and loading them onto their own carrier.

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Key takeaways:

The place of delivery has an impact on the obligations of loading and unloading the goods there.

The seller delivers the goods, which have been cleared for export, to a specified location (which might include the seller's own premises).

The goods can be delivered to a carrier of the buyer's selection or to another party of the buyer's option.

Before the shipping begins, it is up to the buyer and seller to agree on each party's cost and risk responsibilities.

FCA can be used for all modes of transport, including LCL (Less than Container Load), FCL, and air.

If the goods are being delivered to the buyer at another specified place, such as a CFS (Container Freight Station) or Container Yard, the seller is responsible for getting the goods ready for unloading but not for unloading at the destination point.

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Obligations of the Seller:

1. Goods, commercial invoices, and documents

2. Packaging and labeling for export

3. Licenses for export and customs formalities

4. Pre-carriage to terminal

5. Delivery to named place of delivery

6. The cost of a pre-shipment inspection

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Obligations of the Buyer:

1. Pay the goods' cost as mentioned in the sales contract.

2. Unloading from the incoming mode of transport

3. Charges for loading

4. The major carriage

5. Discharge and subsequent shipping

6. Formalities and Duties of Import

7. Pre-shipment inspection costs (for import clearance)

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What's the difference between Ex Works and FCA?

In ex works, the buyer is responsible for the goods from the factory, mill, plant or warehouse, whereas in FCA, the seller delivers the export approved goods to the carrier at the stated location according to the terms and conditions agreed upon by both the seller and the buyer.