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. 🚚
| 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!
Related Terms§
- 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 there’s usually less treasure and more paperwork.
Formulas and Diagrams§
This flowchart above simplifies the seller’s obligations transferring to the buyer; it’s a transportation relay, minus the Olympic torches! 🏅
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” doesn’t mean the seller is giving away their goods for free! 🎁 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, it’s 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§
- Investopedia: Free Carrier (FCA)
- “Incoterms 2020: ICC Guide to Incoterms” - A detailed dive into shipping terms!
Test Your Knowledge: Free Carrier (FCA) Quiz§
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! 📦✈️
