In-depth analysis of the key differences between FCA and FOB trade terms, including cost calculation, risk bearing and other important aspects, to help import and export companies make the best choice.
In international trade, Incoterms (International Trade Terms) are international rules formulated by the International Chamber of Commerce (ICC), which are used to accurately define the rights and obligations of buyers and sellers in international contracts for the sale of goods. Among them, FCA (Free Carrier) and FOB (Free On Board) are the two most commonly used trade terms, and their choice directly affects the cost structure and risk allocation of the transaction.
FCA is the abbreviation of ""Freight to Carrier"", which means that the seller completes its delivery obligation after delivering the goods to the carrier or other person designated by the buyer at the designated place. This designated location can be the seller’s premises, a freight terminal, a container yard, and many other options.
FOB is the abbreviation of ""free on board"", Specially used for sea transportation or inland water transportation. Under the FOB clause, the seller must load the goods onto the ship at the designated port of shipment. Once the goods cross the ship's rail, the risk is transferred to the buyer.
| FCA (Free Carrier) | FOB (Free On Board) |
| ✓ Applicable to all shipping methods | ✓ Only applicable to sea/inland waterway transportation |
| ✓ Flexible delivery location | ✓ FOB fixed |
| ✓ Clear risk transfer points | ✓ Shipside risk transfer |
| ✓ Export customs clearance responsibilities are clear | ✓ Shipping fee included |
The following are the main responsibilities of buyers and sellers under FCA (Free Carrier) trading conditions:
1. Provide goods and commercial invoices that comply with the contract
2. Handle export licenses and other procedures
3. Deliver the goods to the carrier designated by the buyer
4. Responsible for delivering the goods to Risks and expenses before designated place
5. Provide proof of delivery
6. Assist buyer to obtain shipping documents
1. Pay the price according to the contract
2. Be responsible for obtaining the import license
3. Bear all risks and expenses after the delivery of the goods
4. Designate the carrier and contract for transportation. Contract
5. Bear unloading costs
6. Notify the seller of the name of the carrier, time and place of delivery
FCA is a commonly used trade clause in international trade, which clearly stipulates the responsibilities of buyers and sellers in terms of delivery of goods, transfer of risks and sharing of costs. The seller needs to transport the goods to the designated location and hand them over to the carrier designated by the buyer, and is also responsible for export customs clearance; the buyer is responsible for freight and import customs clearance. The flexibility of this clause makes it applicable to all modes of transport. Want to know more freight information? Continue reading Fuuffy News and Blog now to explore more exciting articles!
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