Incoterms® 2020 FCA and CPT: Best practice for shipping containers through ports (2024)

FAQs

What is the difference between FCA and CPT Incoterms 2020? ›

The same buyer responsibilities apply to CPT as to FCA. However, there is one difference; the seller pays the delivery costs. However, it is still the seller's responsibility to deliver the goods to the buyer's carrier.

What does FCA Mean in shipping terms? The FCA Incoterm is an agreement that means “Free Carrier,” where the seller's obligations are to deliver the cargo to an agreed-upon port, known as the “Named Place.” The seller is responsible for exporting the shipment, and all steps before that.

FOB or Free On Board on ocean freight

This is probably the most used Incoterm for sea freight. Under FOB, the seller is obliged to leave the goods free on board of the vessel at the port of origin, packed and cleared for transport.

Under the Free Carrier, or FCA Incoterms® rule, the buyer is responsible for all freight costs.

Under the Incoterms 2020 rules, FCA means the seller loads the goods on the buyer's transport at the seller's premises, or the seller delivers them to another named place. Most often, the buyer hires a transport that picks up the goods at the seller's warehouse.

CPT can be used for all forms of transport and is similar to an FCA agreement; however, unlike FCA, the delivery point is not a defined location. While CPT is not a common Incoterm, there are unique situations where it can be used.

FCA disadvantages

If the buyer does not provide the seller with the carrier's details or booking information, directly or through their carrier, the buyer loses any claims against the seller and is likely in breach of the contract.

– Buyer's Liability: From the moment the goods are delivered to the carrier, the risk transfers to the buyer. Therefore, the buyer becomes liable for any loss or damage to the goods during transit from the named place to the final destination.

Under FCA shipping terms, the seller delivers the goods to the destination named by the buyer. The shipper has responsibility for the goods until they arrive there. The buyer would be responsible for loading the goods for transport. For example, Joe Seller ships goods to Bob Buyer under an FCA shipping term agreement.

Port to Port Incoterms

These terms are used to determine who is responsible for transportation costs, insurance, and other risks associated with the shipment of goods. The following Incoterms can be applied to a port to port shipping under certain conditions: C-Clause: CFR, CIF, CPT and CIP. D-Clause: DDP, DAP and DAT.

Which Incoterms are inappropriate for container goods? ›

FOB is often misapplied to container shipments. It is inappropriate for container shipments since these involve delivering goods to a carrier at a location away from the port. In such situations, FCA (Free Carrier) is a more suitable term.

Incoterms. When goods are bought or sold "carriage paid" (CPT), this means that the seller delivers the goods to a destination agreed in advance between the seller and the buyer.

Under the shipping terms for the FCA Incoterms (short for “Free Carrier”), the seller is responsible for export clearance and delivery of goods to the carrier at the named place of delivery.

Yes! Free Carrier, or FCA, can be used for all modes of transport, including LCL (less than container load), FCL (full container load), and air.

Under the FCA Incoterm, the seller or exporter is accountable for several key aspects: Packaging: The seller is responsible for adequately packaging the goods for safe transport. Conformity and Eligibility: Ensuring that the goods meet contract conditions and export requirements.

Of all the rules, the EXW term places the least amount of risk on the seller, leaving the buyer with the majority of the responsibility. FCA determines that the risk transfer occurs when the seller loads the goods on the buyer's transport or when the seller delivers the goods to a named place of delivery.

Carriage Paid To (CPT) is an international commercial term (Incoterm) denoting that the seller incurs the risks and costs associated with delivering goods to a carrier to an agreed-upon destination. With multiple carriers, the risks and costs transfer to the buyer upon delivery to the first carrier.

What Is the Difference Between FCA and CFR? CFR refers to "cost and freight" while FCA refers to "free carrier." FCA stipulates that the seller and buyer must agree on the point of delivery, as that is the point where responsibility passes from the seller to the buyer.

Under CPT, the buyer must pay: unloading costs (unless they were paid by the seller under the contract of carriage), any costs of the country of transit (unless they have been paid by the seller under the contract of carriage), any duties, taxes, and other costs for import clearance, where applicable, and.