Incoterm FCA explained

What is Incoterm FCA?
There are certain risks, tasks and costs involved in transporting goods. Who these risks and costs are for depends on the pre-agreed Incoterm. If you as a buyer would like to have control over costs, such as transportation costs, FCA is one of the best Incoterms. Also, FCA is a commonly used Incoterm for doing international business. What conditions go with the incoterm FCA? We explain it to you.

Incoterm FCA meaning
Incoterm FCA (Free Carrier) means freight free to carrier. Here the seller's job is to deliver the products/goods to the buyer's carrier at the pre-agreed time and location. Here the buyer designates the carrier of the goods. Incoterm FCA is possible for any mode of transportation.

FCA transport
Incoterm FCA is a versatile and widely used Incoterm. It does not matter what type of transportation mode is used. Agreements are made between seller and buyer as to where the goods will be delivered. There are two options in this; FCA-A and FCA-B.

With FCA-A, the goods are delivered to the carrier at the seller's premises. This is also known as the place of delivery. In FCA-B, the goods are transported to a pre-arranged external location by the seller. The place of delivery is now the external location where the goods are loaded by the carrier. You do not need to specify whether the goods are to be delivered at your own premises or somewhere else; the place name you specify already makes this clear.

Incoterm FCA cost
The cost of transporting the goods to the carrier is the seller's cost. All costs incurred after that, i.e. transporting the goods to the agreed place, are the buyer's. The cost of any further transportation is also for the buyer. Costs for damage or loss after loading the goods are also for the buyer. Arrival costs are also for the buyer to arrange and pay.

Seller obligations under FCA
There are a number of different obligations and costs that the seller encounters under Incoterm FCA. For example, under this incoterm, the seller is required to declare the goods or products for export abroad. The seller is also obligated to ensure that the goods are delivered at the agreed upon time and place by the carrier chosen by the buyer. In doing so, the seller also bears the risk of damage to or loss of the goods until they are loaded by the carrier. In short; until the goods are loaded, the seller is responsible for the goods. After that, all responsibilities go to the buyer.

Buyer's obligations at FCA
From the moment the goods are loaded by the seller, the buyer is responsible for damage and loss of the goods. In addition, it is also the buyer's responsibility to arrange transportation to the destination country. Goods often need to be transported further; you as the buyer must arrange this yourself. If you import goods, you as the buyer are responsible for customs formalities. Unloading the goods at the final destination is also an obligation of the buyer. Thus, the buyer is responsible for the goods from the moment the goods are loaded by the seller into the carrier's vehicle.

Insuring the goods is not mandatory for both parties. This can be chosen, but is not a requirement under this Incoterm.

Incoterm FCA vs. EXW
FCA and EXW are sometimes mixed up. With both Incoterms, it is the selling party's job to prepare the goods for transport. However, the entire transport is arranged by the buyer. The main difference between FCA and EXW is that the buyer has a greater responsibility with EXW. Indeed, with Incoterm EXW, the buyer is responsible for all export formalities. In addition, with EXW, the buyer is also responsible for loading the goods into the carrier's vehicle. But in practice we often see that the seller or his staff already does this. If that happens, there is automatically already FCA because under that incoterm, the seller is responsible for loading the goods.

Sea or air freight shipments with customs obligation?
Global shipments and shipments within Europe to/from non-EU countries are subject to customs obligations. What measures do you need to take and what documents are required? With the knowledge and experience of our specialists in the Rotra customs department, we are able to provide solutions for all your customs obligations that fit your logistics process while you focus on your own core business.

For more info contact us directly.