Free Carrier

“Free Carrier” (FCA) is an international trade term defining the seller’s responsibilities regarding the delivery of goods to a designated location, typically a carrier or another party specified by the buyer. In the maritime context, this term is crucial in establishing the point at which the seller fulfills their obligations and the buyer assumes responsibility for the goods.

Under the International Chamber of Commerce (ICC) Incoterms, specifically, the FCA rule, the seller delivers the goods, cleared for export, to the carrier nominated by the buyer at a specified place. This nominated place could be the seller’s premises, a terminal, or an agreed-upon location. The responsibility for costs and risks shifts from the seller to the buyer at the precise moment of delivery.

In maritime trade, the use of the Free Carrier term ensures clarity between parties involved in international transactions, providing a defined point where ownership, risks, and costs associated with the goods transition from the seller to the buyer. This term streamlines the process and prevents misunderstandings regarding the delivery and transfer of responsibility.

For instance, in the shipping industry, when goods are transported via sea freight, understanding the specifics of the Free Carrier term is essential. The seller arranges for the export clearance and hands over the goods to the carrier, usually at a named place. Once the carrier takes possession, the risk and costs of transportation are then shouldered by the buyer.

The flexibility of the Free Carrier term lies in its adaptability to various modes of transportation, including maritime shipping. It offers a standardized framework for international trade agreements, contributing to smoother transactions and reducing disputes by establishing clear demarcations of responsibility and liability at a predetermined point in the logistics chain.

This Incoterm is beneficial for both sellers and buyers, providing a transparent understanding of their respective roles and obligations in the transportation and delivery of goods. By clearly defining the handover point and the transfer of risks and costs, Free Carrier minimizes uncertainties and supports the smooth flow of maritime trade.