Delivery condition - FCA. Delivery on FCA terms

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Logistics is a complex but highly profitable business. It is not easy for newcomers to it, since most of the entire industry is already occupied by "veterans" who have long established a name for themselves, known to customers. The only way to succeed in this field is to strictly follow the contracts and rules, so that all potential customers can be convinced of the reliability of your company.

In this regard, the FCA delivery condition is especially important, the quality of which can be used to draw conclusions about the company's business qualities. If you don't know what this one is, it's time to look into this issue in detail.

What is this?

FCA (Free Carrier) is a delivery condition under which the buyer is responsible for almost all transportation. He can choose transport, use his own delivery channels, conclude contracts for the supply of goods. This delivery on FCA terms differs from all standard methods of transportation accepted both in our country andand around the world.

The Seller fully fulfills its obligations if the following conditions have been met:

• As soon as customs export clearance was completed.
• If the item was delivered to the next carrier specified by the buyer.
• When delivered to the place specified in the contract.

That's the FCA delivery term. Theoretically, the main responsibility lies with the buyer, but in practice everything turns out a little differently.

The indicated place is very important, since the obligations of the parties largely depend on this clause in the contract. So, if it is planned to start loading on the territory of the supplier, then the latter bears all responsibility for it. On the contrary, if the goods are shipped in any other place, then the seller himself does not bear any responsibility. But! This is only true if some other terms of delivery of goods (FCA) were not previously agreed in the contract.

Specific conditions

As a rule, in practice, all these conditions are significantly specified. Be sure to indicate the type of vehicle, its carrying capacity, other characteristics. In the event that at the initial point of loading the goods are not enough to fully load the transport, the buyer has the right to agree with the supplier to change the route in order to enter some other locality, call at another port to consolidate the cargo and minimize losses from an empty flight.

This is especially important in maritimetransportation, when each unplanned port call in advance is fraught with serious costs. However, in our country, the conditions for rail deliveries are no less stringent.

Here's what FCA delivery terms are, applied to practical terms.

As the person who is responsible for the acceptance of the goods, the buyer can appoint any of his representatives. Please note that upon delivery of the goods to the intermediary, which was appointed by the buyer, all obligations of the supplier are considered to be fully fulfilled. Again, if other provisions were not included in the contract in advance. At this point, special attention should be paid, since this loophole is often used by unscrupulous suppliers and buyers.

Other options

Almost every FCA delivery condition can be fulfilled regardless of the mode of transport and in the form of international transportation, and in this case, you need to find answers to the following questions in the international transport agreement in advance:

• How and on what basis will the goods be shipped to the buyer?
• What will be the responsibility of the carrier if he has to cross the borders of other states?
• Up to what specific limit will liability be imposed directly on the carrier?

Important nuances

There are some points that are extremely important to clarify in advance with the seller himself or his forwarder. This is especially true for the direct characteristics of the transportedcargo. In addition, often the volume of the transported cargo, its weight characteristics and exactingness to the conditions of transportation need to be clarified. This FCA delivery is practically no different from other logistics operations.

Of course, the seller must, on time and upon request, provide information about where and when loading will be performed. It is extremely important for the parties to timely agree on the type of vehicle used, as well as the weight of one consignment (which is especially important when deliveries are made in batches). It is better to coordinate the delivery date of transport not only on a specific day, but also with an indication of the exact start time of loading.

As a rule, a condition is entered into the contract according to which, in case of failure to fulfill the accuracy of the delivery of transport, the agreement can be terminated by any of the participants unilaterally.

Both parties are responsible for the transfer of all data that is necessary for the correct execution of customs inspections and other documents, in proportion to their participation in the transportation.

What should be in a real supply contract?

To make the article as informative as possible, let's give an example of those items that must be in a standard supply agreement. Of course, one should also consider the standard conditions on which all this will be based. Such an FCA supply agreement is concluded in most cases if the parties act in a generally accepted manner.

Immediate terms of delivery

First, in this paragraphthere should be an indication of when and under what conditions the responsibility for the goods passes to the buyer (as a rule, when it is handed over to a representative or loaded onto his transport). The date of such delivery or acceptance is taken as a stamp in the railway, ship (or other) waybill, certified by the seal and / or signature of the buyer's authorized representative.

The date in which the goods are sent to the buyer must be agreed. As a rule, this period is approximately five calendar days from the date of transfer of funds to the account or transfer of cash to the seller.

If the goods must be delivered in batches, it is necessary to draw up a delivery schedule, also specifying the type of vehicle for each (if the goods are of different types). The buyer must send the certified schedule to the supplier no earlier than 20 days before the start of deliveries (the period may vary). In addition, by agreement of the parties, the schedule can be changed at any stage.

If this is the desire of the buyer, then the supplier himself can agree on the schedule and route, but the responsibility is entirely the responsibility of the customer. In this way, the delivery of goods on FCA terms differs from standard types of contracts.

What data is the buyer required to provide?

As a rule, the buyer must provide the supplier with a list of the following required data at least 10 days before the start of deliveries:

• Name and volume of cargo to be sent.
• Full and abbreviated names of consignees.
• Full of themaddresses. Attention! If the house does not have apartments, this should be said additionally.
• Consignee codes are also required.
• If delivery to railway stations is planned, their codes must also be specified separately.
• Again, rail shipments require siding numbers.
• Other information that will help the carrier deliver the paid cargo on time.

If the buyer does not provide such information?

In this case, the contract should have a clause providing for the suspension of deliveries until all the necessary information is received. If you have to return the transport, all costs are also borne by the buyer. If during the transfer of the goods the customer did not provide a certificate of quality, up to five calendar days are given for its dispatch.

Procedure for the transfer of the delivered cargo

Most often, for the acceptance of incoming cargo, an invoice is used in the form No. TORG-12. It must be signed by the financially responsible persons of both parties to the contract, and also certified by their seals. In addition, representatives of the buyer and supplier must be present at the time of acceptance. If this is not the case, all the shortcomings will be paid by the party whose representatives were not present.

Some Complaint Information

Claims for discrepancy between the quantity of the paid goods and its actual volume at the point of unloading are not accepted if the losses are within the limits of natural loss,assigned to this cargo in GOST. In this case, the acceptance documents indicate the amount of goods that was originally paid.

The FCA's creator, Incoterms 2000, says the same thing. The terms of delivery are such that both parties must keep their own records of the shipped goods. If a multi-month delivery is planned, then the reports are most often reconciled on the first of each month.

Reconciliation acts must be accepted by the parties no later than five days from the date of verification. If the delivery data does not match, it is possible to completely stop deliveries to clarify all the details. In the event that disagreements cannot be resolved, the parties may agree to prematurely terminate the contract.

Information about possible termination

If payment is not received within the period specified in the contract, the supplier has the right not to deliver, having previously notified the customer about this. When the latter receives notice, the contract should officially be considered terminated.

In the case when such a clause is in the contract, the buyer cannot use the goods for other purposes. If this is the case, then the supplier must again send a formal notice. As in the previous case, from the moment the document is received by the buyer, the contract will be considered terminated. In the event that the full quantity of goods is not delivered for reasons attributable to the buyer, the supplier may again terminate the contract unilaterally. Again, specialnotice to the customer. These are the mandatory delivery conditions of the FCA (what it is, we have already found out).

Either of the parties, through whose fault the delivery failed, is obliged to fully reimburse all costs. If such is established by the agreement, it is possible to charge interest for each day of the pen alty after the expiration of the period until which the party to the agreement was obliged to pay. Important! The payment of a pen alty and interest on it does not relieve the contracting party from the provision of goods or its acceptance with subsequent payment.

Situations of force majeure

Please note that any FCA delivery condition may not be fulfilled if the party to the contract proves that the failure was caused by factors outside its competence that could not have been foreseen (force majeure).

All natural disasters and epidemics (as well as epizootics), a sudden change in the political situation, accidents or terrorist attacks on transport infrastructure facilities are equated to such cases; decisions of regional authorities that make it impossible to fulfill contractual obligations.

To give a specific example, many agricultural producers once massively violated FCA delivery conditions: 2010 was extremely unsuccessful, and therefore the losses were multimillion.

Any of the parties that refers to force majeure is obliged to notify it no more than within two days from the date of the occurrence of such obligations, having previously certified the documents at any territorial branch of the Chamber of Commerce and Industry of the Russian Federation. If the datacircumstances continue for more than three months, any of the parties to the contract may refuse to fulfill its obligations by notifying the partner in advance and paying for the delivered goods.

How are disputes between parties resolved?

If disputes arise between the parties to the supply, they must be resolved by negotiation. In the event that an agreement cannot be reached, they must seek the help of the Arbitration Court. All disputes must be considered there in compliance with the claim procedure.

So we looked at the FCA terms of delivery. This means that from now on you have the most important ideas about this shipping method, which is becoming more and more popular every year.