What are Incoterms?
Before explaining each individual Incoterm, we first need to get to grips with what Incoterms actually are. Simply put, ‘Incoterms’ are International Commercial Terms, 11 rules for the purpose of making who is responsible for what during an international transaction crystal clear. Accepted globally and becoming a requirement in international trade, they take out the risk of a “lost in translation” misunderstanding and in 3 simple letters (bar the odd caveat) it pinpoints exactly where the burden of responsibility lies and transfers from buyer to seller regarding the costs, jobs and risks involved. It leaves little to no room for confusion and every party involved knows exactly where they stand.
Today we look at FCA…
FCA – Free Carrier
FCA starts transferring more responsibility to the seller, indicating what costs, jobs and risk they will cover. In this case, the seller is required to get the goods to the buyer’s carrier at an agreed location. It is also the seller’s duty to clear the goods for export.
*if delivery occurs at the seller’s premise (anywhere under the seller’s direct control) the seller is responsible for loading the goods onto the buyer’s carrier. Anywhere else, this responsibility falls on the buyer, starting from unloading the seller’s vehicle.
Transfer of risk
When seller’s vehicle arrives at the agreed place and is ready to be unloaded.