Definition
Free Carrier (FCA) is a trade term requiring the seller of goods to deliver those goods to a named airport, shipping terminal, warehouse, or any carrier location specifically designated by the buyer. The term indicates that the seller includes transportation costs in the pricing and assumes the risk of loss until the goods are handed over to the carrier. After that point, responsibility shifts to the buyer. š
| Free Carrier (FCA) |
Cost, Insurance, Freight (CIF) |
| Seller is responsible for delivering goods to a specified location. |
Seller covers costs and insurance until the goods reach the destination port. |
| Buyer assumes responsibility once goods are with the carrier. |
Buyer assumes risk after the goods are loaded on the vessel. |
| Seller must include transportation costs in the sale price. |
Seller includes shipping costs but may not perceive them in item price. |
| Tip: Not to be confused with unloading duties. |
Frequently used when delivering to a port, not on land. |
Examples
When Company A sells a batch of electronics to Company B specified to be delivered at Toronto Airport, Company A is responsible for the delivery of these electronics until the moment they hand them over to the shipping carrier at that airport. On the other hand, after that point, Company B will be in charge, even if the electronics go on a vacation misadventure unmatched by their expectations!
- Cost, Insurance, Freight (CIF): A collective term where the seller covers costs, insurance, and freight charges to bring goods to a specified port. Once there, risk is shifted to the buyer.
- Bill of Lading (BOL): A document issued by a carrier to acknowledge goods were received for transport. Like a treasure map, but thereās usually less treasure and more paperwork.
graph TD;
A[Seller] -->|Transport Costs| B[Delivery Location]
B -->|Goods Handed Over| C[Carrier]
C -->|Next Stop| D[Buyer Responsibility]
This flowchart above simplifies the seller’s obligations transferring to the buyer; it’s a transportation relay, minus the Olympic torches! š
Humor & Insights
- “Shipping goods is like delivering compliments: It should come with care, cost curation, and no pressure while arriving!”
- Fun Fact: The term “Free Carrier” doesnāt mean the seller is giving away their goods for free! š It just has a snazzy title to make responsibility clearer.
Frequently Asked Questions
Q: Can the buyer specify multiple delivery locations?
A: Not unless you want to start a game of carrier hopscotch! Typically, itās a designated location agreed upon in the contract.
Q: What happens if the goods are damaged before reaching the carrier?
A: Not your happy problem! The seller bears the responsibility until the carrier receives it.
Q: Is FCA used worldwide?
A: Absolutely! It’s an internationally accepted term under the Incoterms, making it easier to play the trade game across borders.
References
Test Your Knowledge: Free Carrier (FCA) Quiz
## What does FCA stand for in shipping terms?
- [x] Free Carrier
- [ ] Full Carrier Agreement
- [ ] Fast Cargo Allocation
- [ ] Freight Cost Allocation
> **Explanation:** FCA stands for Free Carrier, indicating the sellerās responsibility for delivery until the goods reach the carrier.
## What is the main obligation of the seller under FCA?
- [x] Deliver goods to a specified location for a carrier
- [ ] Unload goods at the buyerās location
- [ ] Insure all operations during shipment
- [ ] Select the carrier for the buyer
> **Explanation:** The sellerās main obligation is to deliver goods to a chosen carrier location, not unload them or select the carrier!
## Once the seller delivers the goods to the carrier, who assumes responsibility?
- [ ] The seller assumes liability
- [x] The buyer assumes responsibility
- [ ] The carrier assumes liability
- [ ] No one, it's a free-for-all
> **Explanation:** Once the goods are with the carrier, the buyer takes full responsibility for themālife as a buyer just got serious!
## Does the seller need to pay for transporting the goods?
- [x] Yes, included in the price
- [ ] No, it's the buyer's problem
- [ ] Only if the carrier drops them off
- [ ] Only if they feel like it
> **Explanation:** Yes! The seller must include the transport costs in the pricing as per the FCA terms.
## Can FCA apply to air freight?
- [x] Yes, it's used for various transport modes
- [ ] No, it's only for maritime transport
- [ ] Only if proper paperwork is submitted
- [ ] Only for freight forwarding companies
> **Explanation:** FCA is versatile and can apply to any transport modeāair, land, seaāall the ways to get the goods that bolster a business!
## What does a seller need to do under FCA before goods can switch to the carrier?
- [x] Deliver goods to a designated location
- [ ] Write a formal letter to the buyer
- [ ] Place the goods in a specific warehouse
- [ ] Pay for the carrierās lunch
> **Explanation:** A seller should deliver goods to a designated location; lunch is negotiable at best!
## Is unloading the responsibility of the seller under FCA?
- [ ] Yes, they have to unload for the carrier
- [x] No, the carrier handles unloading
- [ ] Only if the buyer is busy
- [ ] It depends on the size of the goods
> **Explanation:** Nope! Unloading is the carrierās job, not the seller's - no need for unloading stress!
## What's an example of FCA in action?
- [x] Sender delivers packages to a specified post office.
- [ ] A company ships all products to its own warehouse.
- [ ] A buyer picks up items personally from the seller.
- [ ] The seller leaves the goods at random spots.
> **Explanation:** The correct example! FCA means designated delivery to the carrier, not āguess where I left the goods!ā
## How does the free in Free Carrier confuse people?
- [x] They think the goods are delivered at no charge.
- [ ] They believe it means free shipping until the receiver
- [ ] They take it literally and expect a free gift
- [ ] It makes deciding if to use it harder
> **Explanation:** That's right! People often assume it means "free as in no cost" rather than the sellerās obligations!
## Does FCA eliminate seller transaction risks?
- [ ] Yes, completely removes all risks
- [ ] Only for damage during transport
- [x] No, seller still bears risks until the carrier has goods
- [ ] Only while theyāre at the sellerās warehouse
> **Explanation:** Not quite! The seller is still risky until the point theyāve handed over goods to the carrier!
Thank you for diving into the delightful world of Free Carrier (FCA)! Remember, being clear on terms may send your business relationships zipping smoothly like an express delivery! š¦āļø
