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Difference between FCA and FOB in terms of Delivery of goods.
How to differentiate FOB and FCA in term of delivery? We have discussed about FCA and FOB in detail in this web blog separately. I hope the contents of those articles are easy to understand. Let me state in simple explanation on FOB Vs FCA.
FCA terms of delivery were introduced under international commercial Terms 2010. The term FOB has been being continued for the past many decades, however after 2010 FOB terms of shipping has been included in the smaller groups.
What is a FOB term in easy language?
In an FOB terms of delivery, the seller delivers the goods on board the vessel at his own cost. The rest of expenses and risk of on carriage to final destination bears by the buyer. In an export shipment, once the goods ready for export, the shipper arranges to move cargo to load port after necessary customs formalities. The goods are loaded on board the vessel at the cost of exporter. This is the simple explanation on FOB terms. Also read Basic tips to exporter while contracting terms of delivery on FOB basis . Who decides shipping carrier on FOB shipments?
What is FCA terms of shipping in quick reference?
In terms of delivery FCA, the export cleared goods are delivered by the seller to the carrier at the named and defined location mentioned in the contract. So the obligation to deliver goods fulfills by the seller up to the location where FCA contracts. From the said point of location, buyer needs to take responsibility. In an FCA terms of delivery, normally seller’s assistance is required by the buyer to deliver goods at contracted place at buyer’s costs and risks. If the location to deliver goods has not been mentioned in the contract, the seller can arrange to deliver the goods to the location where buyer’s carrier is available by mutually accepting. In an FCA terms of delivery, the delivery of goods also can be at the seller’s premises, if mutually agreed between buyer and seller. However in such transactions, the ex-works terms are used. FCA terms are commonly used on container transport movement as RO/RO (roll on – roll off) used by trailers and ferries. If the buyer can not carry out the export formalities, either directly or indirectly, FCA terms are opted in such business transactions also. I hope, the FCA terms are explained in easy to understand.
In short, under FOB terms, the seller completes all export formalities and delivers goods to get on board the vessel arranged by buyer. However in FCA terms, the seller’s liability to deliver goods fulfills, once after loading goods to the carrier appointed by buyer which is prior to onboard the main vessel. The goods need to be gone onboard the vessel under FOB terms, where as the fulfillment of obligation to deliver goods by the seller ends, when loading of goods to the carrier at the location agreed mutually in FCA terms. Also read FCA Term of Delivery, a simplified tutorial Mode of transport under EX WORKS/FCA/CPT/CIP/DAT/DAP/DDP/FAS/FOB/CFR/CIF
Detailed articles about Inco Terms of Delivery under export and import of International business have been mentioned in separate category – INCO TERMS – in this web site. You can click here to read.
This is the simple explanation on difference between FCA and FOB. Do you have different thought on FCA vs.. FOB?
The above information is a part of Import Export Training online
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