FREE CARRIER (FCA) PART I – Introducing Free Carrier the International Chamber of Commerce (ICC) defines the second Incoterm, Free Carrier (FCA), at a named place, as “the seller delivers the goods, cleared for export, to the carrier nominated by the buyer at the named place. The chosen place of delivery has an impact on the obligations of loading and unloading the goods at that place. If delivery occurs at the seller’s premises, the seller is responsible for loading. If delivery occurs at any other place, the seller is not responsible for unloading”. The carrier means “any person who, in a contract of carriage, undertakes to perform or to procure the performance of transport by rail, road, air, sea, inland waterway or by a combination of such modes”. Where the seller has delivered the goods to a person other than a carrier, as nominated by the buyer, the seller is deemed to have fulfilled his obligation to deliver the goods. Free Carrier is one of three F-terms also known as the main carriage unpaid terms, and is also a multi-modal transport term which means that it can be used for any form of transport i.e. road, rail, sea, and air. According to Professor Jan Ramsberg, the chairman of the ICC Working Party on Trade Terms, the seller’s primary duty is to deliver the goods at the named point, provide evidence of the delivery of the goods to the carrier, and to arrange the clearance of the goods. The buyer’s primary duty is to nominate the carrier, and to contract for carriage. The documents required in terms of the contract of sale should be the commercial invoice, the document evidencing the delivery of the goods to the carrier, and an export licence if necessary. The other documents that could be considered for stipulation in the contract of sale could be any documents needed for the transit of the goods through any country or for import clearance. The three critical points of FCA are: • that the carriage be arranged by the buyer or by the seller on the buyer’s behalf. • that, the risk transfers from the seller to the buyer when the goods have been delivered to the carrier at the named place • that the cost transfers from the seller to the buyer when the goods have been delivered to the carrier at the named place. Next week’s issue will focus on the seller’s obligations under Free Carrier (FCA).
