Incolearn – Learning more about Incoterms 2000

FREE CARRIER (FCA) PART IV –
Summary and Conclusion
According to the International Chamber of Commerce (ICC), the second Incoterm Free Carrier (FCA), at a named place, is defined as “the seller delivers the goods, cleared for export, to the carrier nominated by the buyer at the named place. The chosen place of delivery has an impact on the obligations of loading and unloading the goods at that place. If delivery occurs at the seller’s premises, the seller is responsible for loading. If delivery occurs at any other place, the seller is not responsible for unloading”.
Previously we introduced FCA and then considered what Professor Jan Ramsberg, the chairman of the ICC Working Party on Trade Terms, had to say about the ten obligations that the seller and buyer might need to fulfil in terms of FCA.
In accordance with the description of FCA, it can be used irrespective of the mode of transport, and should be used whenever handing over to the carrier is not completed alongside a ship or over a ship’s rail. In the latter instances, the terms FAS and FOB should instead be used.
FCA is the main, and first, of the three F-terms, also known as a main carriage unpaid term, requiring the seller to hand over the goods to a nominated carrier free of risk and expense to the buyer.
In summary, the seller’s primary duty is to deliver the goods at a named point, to provide evidence of the delivery of the goods to the carrier, and to arrange export clearance, whilst the buyer’s primary duty is to nominate the carrier through the contract of carriage.
The documents required in terms of the contract of sale should be the commercial invoice, documents evidencing the delivery of the goods to the carrier, and an export licence if necessary. Other documents that could be considered for stipulation in the contract of sale could be any documents needed for the transit of the goods through any country or for import clearance.
The three critical points of FCA are: firstly, that the buyer must arrange the carriage, or it must be arranged by the seller on the buyer’s behalf; secondly, that the risk transfers from the seller to the buyer when the goods have been delivered to the carrier at the named place; and thirdly, that the cost transfers from the seller to the buyer when the goods have been delivered to the carrier at the named place.
Next week’s column will define the third Incoterm – Free Alongside Ship (FAS).