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Who pays freight on fob and FCA?

Answer:

There are a few different ways that freight can be paid for on FOB (Free On Board) shipments. The most common way is for the shipper to pay the freight charges, and then add the cost of freight into the invoice price of the goods being shipped. This way, the buyer essentially pays for the shipment as part of the purchase price of the goods. Alternatively, the buyer can arrange and pay for their own shipping, which is known as shipping FOB destination. In this case, the shipper would provide a quote for the shipping costs and the buyer would be responsible for paying those charges.

Who pays freight on FCA terms?

Answer: It depends on the terms of the sale contract. If it’s FOB (free on board) then the buyer pays for freight. If it’s CIF (cost, insurance, and freight) then the seller pays for freight.

When a seller quotes CIF they’re including the cost of getting the goods to the port of shipment, as well as insurance and freight costs. When a buyer quotes FOB they’re only responsible for getting the goods to the port; after that it’s up to the seller to get them to their final destination. So if you’re buying something and you see CIF quoted, make sure you clarify with the seller what “freight” means in that context.

When is FCA used?

FCA is a flexible Incoterm, and can be used for intermodal transportation, as well as any other mode, especially for containerized freight, though it can also be used via air, ocean, and railway. It’s a suitable solution for all cases where the buyer must arrange the main carriage of the shipment.

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Nikolas White

Logistic, Warehouse and Shipping Services Expert. My work has been published in many different formats across North America with topics ranging from international trade to global logistics or supply chain management–all on the forefront of what’s happening right now!

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