What is the difference between FCA and FOB in terms of delivery?
Before the process of transportation of goods begins, buyers and sellers enter into an agreement so as to avoid confusion.Incoterms is a generic name for several types of agreements that are applicable to all international trade.The terms of trade include shipping and freight details.Both buyers and sellers are confused by the similarities of the two contracts.This article tries to highlight the differences between the two.
Free on Board is a popular mode of contract between buyers and sellers.The seller is responsible for loading the goods on to the vessel that is chosen by the buyer.As soon as the goods are loaded on to the vessel, the responsibility ceases, and all the risk is transferred onto the buyer.It is not applicable to trade by road, rail, air, as well as sea.The seller is responsible for the goods only up to the time that he loads the cargo at his own location, but the carrier is chosen by the buyer.
There are many similarities between the two, but their differences do not come out.Let's see how these contracts affect suppliers and buyers.
If the goods are damaged in the process of being loaded on to the carrier, what happens?The seller is responsible for damaged goods if they fall outside the ship.The buyer is responsible for damage if the goods fall inside the vessel.The buyer is not saved if he does not have insurance.The supplier is not responsible for loading cargo if it is being transported through rail, road, or air.His responsibility stops after he hands over the goods to the trucks.
Free Carrier, Free on Board, incoterms, international trade, sales, Transport and Logistics
A graduate of Electronic Engineering with a background in HR, Training and Development has over 15 years of field experience.