FCA— Free Carrier(Giao cho người vận tải)

Delivery & risk transfer

There are two ways to deliver. At the seller's premises, delivery takes place once the goods are loaded on the vehicle the buyer sends. At any other place, delivery takes place once the goods, still on the seller's vehicle, are placed at the carrier's disposal ready for unloading (the seller does not unload). Risk passes at exactly that point.

Cost split

The seller pays up to the delivery point, including export clearance; the buyer pays from there on: main carriage, insurance (if any) and import clearance. For containers from Vietnam the handover point is usually the container yard (CY) or container freight station (CFS); both sides' local charges should be spelt out in the contract.

Insurance

Neither party is obliged to insure. Whichever party bears the transit risk should consider buying cover for that leg.

Watch out for

• New in Incoterms 2020: the parties may agree that the buyer instructs its carrier to issue an on-board bill of lading to the seller. This resolves the L/C problem where an on-board document is required although delivery takes place before loading.
• Use FCA rather than FOB for containers. In practice a container is handed over at the terminal before it is loaded; under FOB the seller carries the risk for the whole time the cargo waits at the port, without controlling it.
• The contract should name the exact delivery point (which warehouse, which yard). If it is left vague, the seller may choose the point that suits it.