The responsibility of seller increases in Category F of the Incoterms, wherein the seller is required to transport the products to the main carrier (i.e. Shipping Terminal, Warehouse, Airport and so).
There are 3 incoterms in Category F as follows,
- FCA – Free carrier
- FAS – Free Alongside Ship
- FOB – Free On Board
The term ‘Free’ acts in the perspective of the seller and ‘Carrier’ refers to the main transport (Ship or Air cargo).
Category F essentially clarifies – “What is free for the seller?” – Carrier? Transport near to the ship? Or on Board?
FCA (Free carrier) :
In Free carrier, seller is responsible for the delivery of goods to the destination before the main transport. The place of delivery can be any place as expected by the buyer, but within the country.
FCA is used for all modes of transport (Air, Land, Water).
- The cost and risk of the goods to the buyer is only up till the transfer.
- Seller is not responsible for loading of the goods in the main carrier. She has to only deliver the goods.
- It is mostly used for Containerised goods.
FAS (Free Alongside Ship) :
The first thing to remember about FAS is that – it is used only for waterways. It is one among the 4 Incoterms which is to be used for Sea & Inland transport.
In Free Alongside Ship, the goods has to be delivered by the seller alongside ship in the designated port.
- Here again, Loading is by the buyer.
- Export Duties and Origin Terminal charges is also by the buyer.
- It is a popular term with ‘Bulk Cargo.’ For goods such as Oil, Grain…
FOB (Free On Board) :
FOB is also an exclusive term for Sea & Inland water transport.
In FOB the main carrier can be free but it is the responsibility of the seller to deliver the goods on the vessel.
- Seller has to take care of Delivery to port/place, Export duties, Terminal Charges and Loading on vessel.
- It is one of the commonly used terms for non-containerised cargo
- E-Commerce companies use the FOB Shipping point to clarify their responsibility. For eg. FOB Cochin, FOB Vancouver, FOB Cape Town
Responsibility matrix for the seller:
Bottomline : One can clearly see the role and responsibility of the seller increases from FCA << FAS << FOB. And FAS & FOB is only for Sea & Inland water transport. Though the main carrier charge is taken care by the Buyer, the seller has a significant responsibility in Category F and also control.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about any specific circumstances.