FCA delivery term refers to the seller handing over the goods, with export customs procedures completed, to the carrier or place of delivery designated by the buyer in international trade. When the goods are handed over to the carrier at the designated location, the risk is transferred to the buyer. Main transportation, freight, insurance, import customs and expenses in the destination country are managed by the buyer. FCA is a flexible Incoterms rule that can be used in road, air, sea, rail and combined transportation. If delivery takes place at the seller's warehouse, loading is the seller's responsibility. If another terminal or carrier point is selected, the seller brings the goods there and makes them ready, without unloading.
Elements of the FCA Delivery Term
FCA delivery is built on three basic elements: place of delivery, carrier and transfer of risk. The place of delivery must be clearly stated in the contract. If a clear point such as a factory, warehouse, port terminal, air cargo area, bonded warehouse or carrier branch is not selected, the boundaries of expense and responsibility may become confused. The seller completes the export customs and prepares the product at the designated point. The buyer, on the other hand, determines the carrier, concludes the main transportation contract and follows up on the post-delivery operation. There is no insurance obligation under the FCA rule. Since the risk passes to the buyer, the buyer should evaluate the insurance decision in terms of commercial security.
How Is the FCA Delivery Term Carried Out?
When applying the FCA delivery term, the first step is to clearly state the place of delivery in the sales contract. If the place of delivery is the seller's premises, the seller loads the product onto the vehicle. If the place of delivery is another point, the seller transports the goods there and makes them ready for the carrier to pick up. The transaction order generally proceeds as follows: preparation of the product, packaging, completion of export customs procedures, notification to the carrier, and issuance of the delivery document. The buyer chooses the transportation company. When the carrier receives the product, the risk passes to the buyer. The moment of delivery must be recorded with a document. Otherwise, in cases of damage, delay or incomplete delivery, differences of interpretation may arise between the parties.
The Seller's Responsibilities Under FCA
Under the FCA delivery term, the seller undertakes the preparation on the departure side of the product and the export procedures. The seller's responsibility is limited to delivering the goods to the carrier at the designated location. The more clearly the place of delivery is stated in the contract, the more smoothly the process proceeds.
- Prepares the product in accordance with the sales contract.
- Handles packaging and labeling operations.
- Completes the export customs procedures.
- Issues the necessary export documents.
- Brings the goods to the agreed place of delivery.
- If the place of delivery is their own premises, performs the loading onto the vehicle.
- If the place of delivery is another point, prepares the product without unloading.
- Documents the moment of delivery to the carrier.
- Transmits shipping and delivery information to the buyer.
- Checks the documents to prevent delays caused by missing paperwork.
The Buyer's Responsibilities Under FCA
After FCA delivery, the buyer's responsibility expands. The buyer plans the main transportation process and assumes the risks after the goods pass to the carrier. Import procedures, freight, insurance and expenses in the destination country are evaluated on the buyer's side.
- Selects the carrier.
- Concludes the main transportation contract.
- Pays the freight charges.
- Assumes the risks after delivery.
- Makes the insurance decision.
- Carries out the import customs in the destination country.
- Covers the taxes and duties.
- Checks the delivery document.
- In case of damage, follows up on the report and insurance process.
- Notifies the seller of the carrier information in a timely manner.
The Logistics Company's Basic Responsibilities Under FCA
The logistics company enters the process as the carrier or transportation organizer designated by the buyer. It receives the goods at the place of delivery, issues the transportation document and carries out the subsequent transportation plan for the load. The time of receipt of the goods, vehicle information, suitability for loading and document control must be carefully managed. Since the risk passes to the buyer when the carrier receives the product, accurate record-keeping is important. If damaged packaging, missing parcels, wet pallets or unsuitable loading is observed, a note must be made at the time of delivery. Orderly document flow reduces possible problems during customs and transportation processes.
Issues to Consider According to Turkish Customs Legislation
When FCA delivery is preferred for export from Turkey, the seller acts as the party who will complete the export customs procedures. The product HS code, invoice, packing list, origin information, export declaration and necessary permits must be prepared correctly. If a special export permit, control document or technical document is required, this must be clarified before shipment. Even if the buyer selects the carrier, the customs preparation at the Turkish departure remains on the seller's side. If carrier information is shared late, the declaration and transportation plan may be disrupted. If the place of delivery is a port or terminal, the site rules, entry permits and cargo acceptance hours must be checked. In international trade, document compliance is as important as the delivery condition.
Features of the FCA Delivery Term
FCA is a balanced delivery structure that gives the seller more responsibility than EXW and the buyer more responsibility than DAP or DDP. The seller handles the export procedures. The buyer takes on the main transportation side. The transfer of risk takes place when the goods are delivered to the carrier at the designated location. The FCA rule can be used in any mode of transportation. It may be considered more suitable than FOB in containerized sea transportation, because the goods are often delivered to the terminal rather than directly to the ship. Incoterms 2020 includes an option whereby, if the parties agree, the buyer can have the carrier issue a bill of lading bearing an on-board notation to the seller.
What Are the Advantages of the FCA Delivery Term?
The FCA delivery term provides a clearer division of duties between the seller and the buyer. Since the seller knows the procedures on the export side, the departure customs can proceed more smoothly. The buyer, on the other hand, manages the main transportation process with their own logistics network. In this way, freight negotiations, carrier selection and delivery tracking remain under the buyer's control. FCA is suitable for different modes of transportation. It can be used in road, air, rail and sea-connected shipments. Since loading is performed by the seller during delivery at the seller's premises, a more practical structure is created for the buyer compared to EXW. For companies that import regularly, cost tracking can be easier.
What Are the Disadvantages of the FCA Delivery Term?
FCA delivery requires serious follow-up by the buyer on the transportation side. Since the risk passes to the buyer the moment the goods are delivered to the carrier, subsequent damage, loss and delays are significant for the buyer. If insurance has not been arranged, the loss may directly fall on the buyer. From the seller's perspective, the biggest risk is leaving the place of delivery and loading responsibility unclear. When a place of delivery other than the seller's premises is selected, the unloading responsibility does not belong to the seller. Misinterpretation can give rise to additional expenses at the terminal. Late arrival of carrier information can also affect export documents and shipment time.
How Is the FCA Price Calculation Made?
When calculating the FCA price, the expenses borne by the seller up to the place of delivery are added to the cost of the goods.
A sample calculation can be made as follows:
Suppose the product price is 20,000 dollars, the packaging expense is 500 dollars, in-factory preparation is 200 dollars, export customs procedures are 300 dollars, and if the place of delivery is different from the seller's premises, inland transportation is 400 dollars. The total FCA price comes to the level of 21,400 dollars.
If the place of delivery is the seller's factory, the inland transportation item may be omitted. If a port terminal or air cargo area is selected as the place of delivery, inland transportation, terminal entry expense and document operation can be added to the price. Freight, insurance, import tax and expenses in the destination country are calculated separately by the buyer.
When Should the FCA Delivery Term Contract Be Used?
The FCA delivery term contract can be used in cases where the buyer wants to handle the main transportation organization themselves. It establishes a balanced structure for transactions where the seller needs to manage the export customs and the buyer needs to choose the transportation company. It can be considered in container shipments, air cargo deliveries, road transport and trade where the buyer has a strong logistics network. If the seller does not want to undertake the entire transportation process and the buyer does not want to deal with the departure customs, FCA becomes a logical option.
For What Types of Products Is the FCA Delivery Term Suitable?
FCA can be used in textiles, machine parts, electronic products, automotive spare parts, non-food packaged products, industrial equipment, furniture, raw materials and containerized loads. The structure of the transportation organization is more important than the type of product. If the goods can be delivered to the designated carrier and the export customs is to be handled by the seller, the FCA structure can be considered. For sensitive products, the packaging standard must be clearly stated. For dangerous goods, cold chain or products requiring special permits, the document and transportation conditions must be checked before shipment.
Is Insurance Required Under the FCA Delivery Term?
Insurance is not mandatory under FCA delivery. However, since the risk passes to the buyer after delivery to the carrier, insurance provides important security for the buyer. The buyer should consider taking out a policy based on product value, transportation distance, route risk and carrier conditions. The seller is not obliged to take out insurance. If the parties want the seller to organize the insurance, this must be specifically stated in the contract. Otherwise, the insurance responsibility remains in the buyer's planning.
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What Should the Buyer Do in Case of Damage During Transportation Under the FCA Delivery Term?
If damage occurs during transportation, the buyer should first check the delivery document, transportation paperwork and packaging condition. If the damage is visible, a report should be made at the time of delivery, photographs should be taken, and written notification should be given to the carrier. If insurance has been arranged, the notification period in accordance with the policy conditions must not be missed. Since the risk lies with the buyer after the goods pass to the carrier, document order becomes critical. Missing reports may lead to the rejection of the damage claim. The buyer should obtain a report from the carrier and request the necessary document support from the seller.
How Should Payment Terms Be Determined Under the FCA Delivery Term?
Payment terms must be clearly stated in the sales contract separately from the delivery rule. Cash in advance, cash against goods, letter of credit, cash against documents or deferred payment options can be determined according to the commercial relationship. The FCA delivery rule does not regulate the payment time on its own; it only determines the cost and risk sharing. In transactions with letters of credit, the need for a transportation document must be discussed from the outset. The bill of lading option in Incoterms 2020 may become important for some shipments in banking transactions. The payment date, delivery document, invoice, packing list and transportation document must be prepared in a manner consistent with each other. A clear payment plan reduces the chance of the parties experiencing disputes after shipment.
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