With FCA, the seller is responsible for delivering the goods to the buyer’s nominated premises. He needs to load the stocks onto the buyer’s transportation. Then, the seller organises the shipping, including export clearance and meeting security requirements.
The risk is transferred once the goods are loaded onto the buyer’s transportation. Thus, any damage to the products when on board the vessel is the responsibility of the buyer.
The buyer pays the cost of freight, bill of lading fees and insurance. Also, he pays for unloading and transportation costs to the final destination.
FCA is the term that has been most significantly changed under the Incoterms 2020 rules. Previously, the use of a transport intermediary meant the seller was unable to obtain a bill of lading with onboard notation. The reason was that he did not present the goods directly to the international shipper. Without the BL, the transacting bank would not authorise payment to the seller.
Under the new Incoterms 2020, FCA resolves this problem. The buyer should instruct the carrier to issue a bill of lading with the onboard notation to the seller. The parties specify this notation on the sale contract.
