Incoterms – FCA

Incoterms – FCA
FAC (Free Carrier) means that the seller fulfils his obligation to deliver when he has handed over the goods, cleared for export, into the charge of the carrier named by the buyer at the named place or point. If no precise point is indicated by the buyer, the seller may choose within the place or range stipulated where the carrier shall take the goods into his charge. When, according to commercial practice, the seller’s assistance is required in making the contract with the carrier (such as in rail or air transport) the seller may act the buyer’s risk and expense.
FAC requires the seller to take responsibility for risks and costs up to this handover, including export customs clearance.
It is important to consider that the nature of the carrier being used, and the various points of transfer that different modes of transport may involve, are subject to extreme variables. It is common that the transport used to deliver or handover is a different than the actual transport to be used for the main carriage (e.g. collected by road for an airfreight export). The term may well involve detailed instruction to make such distinctions and it should be noted that multimodal transport documents better serve this term than traditional documents such as Bills of Lading or Airway bills.
For deep-sea transactions, FCA represents an excellent alternative to FOB, which is inappropriate in most modern port operations. However, under FCA the seller hands over risks/control of the cargo at a point prior to the vessel, frequently prior to the port. Although this reflects the physical condition of much sea freight trade conducted using ‘FOB’; it is a departure from the commoner financial interpretation of ‘FOB’. This normally obligates the seller to pay for the origin handling/loading and/or stowage charges raised by the port.
Under FCA these charges are for the buyer’s account. If this is not acceptable, the term may be modified to represent the passage of FCA risks with ‘FOB’ costs.
FCA may involve the carrier collecting from the seller or the seller delivering to the carrier, dependant on the conditions of the sales contract.