What does fca free carrier mean

To receive our free information pack, simply enter your details in our enquiry form. Tell me more. Search Incoterms Explained:. Delivery and transfer of risk takes place when the truck or other vehicle arrives at this place, ready for unloading — in other words, the carrier is responsible for unloading the goods. If there is more than one carrier, then risk transfers on delivery to the first carrier. While these costs are not problematic for the buyer to pay, the inefficiency arises in the event of a problem.

The International Chamber of Commerce only recommends this Incoterm to be used with containerized shipments, and there is a reason why they suggest this. In this event, the Named Place is the terminal, and thus the transfer of risk takes place after the cargo goes through the export formalities.

However, in the event, FCA is a quoted Incoterm, and the buyer requests the cargo be shipped to a Named Place other than the port, such as a forwarders warehouse, the transfer of risk occurs once the truck arrives at the destination. In this event, the buyer would be required to cover the costs to unload the shipment at their forwarders warehouse, while also being responsible for the export formalities, terminal, and carriage loading charges. In certain countries, such as China, FCA goes against the status quo.

For buyers who are adamant on purchasing under FCA terms, most sellers will agree, however, the notable trend is for Chinese sellers to quote under FOB terms. So while FCA is not incredibly different, the disadvantage of using it can be that sellers are not as familiar with the process. When exporting products from any country, the best Incoterm is frequently where both the buyer and seller have the most experience.

The only time a buyer would want to consider FCA is if most of the following parameters can be met:. If the above four conditions can be met, FCA is a viable option to consider as an Incoterm. In general, unless you fall into the category above, the FCA agreement is not the most ideal agreement to use when importing from China.

China is a unique country where factories export so much and are capable of doing it rather efficiently because they primarily rely on one major Incoterm, which is FOB. So unless there is a legitimate reason why FOB is not ideal for your shipment, it is best to stick with what works, and not slow down or confuse things by testing out other terms. If you are an importer looking to try FCA for your next China shipment, this is what we can recommend.

First, ask your factory if they are comfortable with quoting FCA. FCA is an Incoterm which works for all modes of transport. FOB is only used in waterway shipments. FCA transfer risk takes place at an agreed-upon point, whereas with FOB, the buyer assumes the risk on the vessel.

Contact Us Login. Sourcing Quality Control Shipping Menu. Table of Contents. What does FCA Mean in shipping terms? Sellers Responsibilities Under FCA Incoterms, the seller must handle the full export process for the products they are selling. At this point, the buyer assumes all responsibility. Buyers and sellers engaged in economic trade requiring the shipment of goods can use a free carrier agreement FCA to describe any transportation point, regardless of the number of transportation modes involved in the shipping process.

It's the seller's duty to safely transport the goods to that facility. The carrier can be any kind of transportation service, such as a truck, train, boat, or airplane.

Liability for the merchandise transfers from the seller to the carrier or buyer at the time the seller delivers the goods to the agreed port or area.

The seller is only responsible for delivery to the specified destination as part of the liability transfer. It isn't obligated to unload the goods, but the seller might be responsible for ensuring that the goods have been cleared for export out of the United States if the destination is the seller's premises. The buyer doesn't have to deal with export details and licenses because this is the responsibility of the seller. The buyer must arrange for transport, however. Once goods arrive at the carrier and title transfers to the buyer, the goods become an asset on the buyer's balance sheet.

Contracts involving international transportation often contain abbreviated trade terms, or terms of sale, that describe shipment specifics. These might include the time and place of delivery, payment, the point at which the risk of loss shifts from the seller to the buyer, and the party responsible for freight and insurance costs. The details are highly specific in nature because identifying the exact moment when liabilities and cost responsibilities transfer are key points within the agreement.

The most commonly known trade terms are international commercial terms or Incoterms , which are internationally recognized standards published by the International Chamber of Commerce ICC. These are often identical in form to domestic terms, such as the Uniform Commercial Code UCC , but there can be slight differences in their official interpretations.

Parties to a contract must expressly indicate the governing law of their terms and which edition of the published Incoterms they're using.

The ICC updates Incoterms every 10 years. The following is an example of the kinds of terms included in Incoterms:. All Incoterms are legal terms, but their exact definitions can differ by country.

Using clarity and specificity when citing them is critical. Experts recommend that any party involved in international trade consult with an appropriate legal professional—such as a trade attorney—before using any trade term within a contract. The seller delivers the goods to the destination named by the buyer. The shipper assumes responsibility for the goods when they arrive there. The buyer would be responsible for loading the goods for transport. For example, Joe Seller ships goods to Bob Buyer.

Bob opts to use his shipper with whom he's done business before.