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Difference Between FCA and Ex Works

FCA vs Ex Works

FCA (Free Carrier) and Ex Works are commercial terms used internationally. FCA and Ex Works are terms that are part of Incoterms or the International Commercial terms. The International Chamber of Commerce has dictated these terms. There is only a slight difference between the two terms.

Both the FCA And Ex Works are related to the transportation or shipping of goods from the worksite or the factory. In both FCA and Ex Works, the buyer has more obligations than the seller.

What is meant by Ex Works? It means that the seller has only the responsibility to make the goods available at the premises like the worksite or the factory. As per this term, the seller is not responsible for loading the goods on the vehicles of the buyers. The seller would not bear the cost of loading and transportation, and the entire amount has to be borne by the buyer only. The seller would also not take the risk of the goods once they are transported. So this term specifies that the buyer has more obligations than the seller.

Now let us look at FCA. Free Carrier is just the opposite of Ex Works. Here in FCA, the seller is responsible for the arrangement of transportation. However, the seller would be making the arrangements on behalf of the buyer. Moreover, the buyer has to pay for the transportation. The buyer is also responsible for the insurance covered. Though the seller makes all the arrangements for the shipping or transportation of goods, he does not take any responsibility or any risks.

Summary:

1.Both FCA And Ex Works are related to the transportation or shipping of goods from the worksite or the factory.
2.Ex Works means that the seller has only the responsibility to make the goods available at the premises like the worksite or the factory. The seller is not responsible for loading the goods on the vehicles of the buyers.
3.In FCA, the seller is responsible for the arrangement of transportation. However, the seller would be making the arrangements on behalf of the buyer.
4.Both the terms state that the seller would not take the risk for the goods once they are transported.
5.The seller would not bear the cost of loading and transportation, and the entire amount has to be borne by the buyer only.


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2 Comments

  1. you are incorrect. This article can be very misleading for beginners in logistics industry
    1. FCA is not the opposite of Ex-Works, both are quite similar in terms of location of handover of goods and payment obligations
    2. In FCA, the seller must only make sure that the goods are loaded onto the transportation but still the buyer pays for transportation from seller’s premises to the agreed location (usually distribution centers, bonded warehouse, or warehouse inside port area/customs zone
    etc.
    Please make your fact straight

    • Dear Rizal Djohan,
      Today I read your below comment(in highlight) on FCA and Ex work. Seems you have knowledge in shipping. I went through your profile that you worked in APL and SDV logistics. I live in Bangladesh and working in freight forwarding company for few years. But I could not understand clearly FCA. When Ex work is loading from shipper Factory premise then in FCA shipment does the goods also loads/ containerized in shipper factory premise ?? (you told below that FCA and Ex work quite similar)
      So, my question is:
      Qs. 1) in FCA shipment does the goods loads/ get containerized in shipper factory premise ?? (same as Ex-work?)
      OR, shipper carries the goods to seaport /airport / or forwarder warehouse themselves on behalf / on cost of the buyer?
      Qs. 2) please mark (√ ) which one right below:
      a) FCA : goods loading/get containerized at shipper factory premise.
      Ex- work: goods loading/get containerized at shipper factory premise.
      b) FCA : shipper carries the goods themselves (on behalf of buyer) to airport warehouse / forwarder warehouse. FCA is On behalf / On cost & risk of buyer, Then, does FCA only Collect/ FOB shipment always? Never prepaid? Or, FCA can be both Prepaid and FOB/ Collect?
      Ex- work: goods loading/ get containerized at shipper factory premise.
      Qs. 3) if FCA is On behalf / On cost & risk of buyer, Then, does FCA term means only Collect/ FOB shipment everytime? Never prepaid? Or, FCA can be both Prepaid and FOB/ Collect?
      Qs. 4) does Ex-work term means only Collect/ FOB shipment everytime? Never prepaid? Or, Ex-work can be both Prepaid and FOB/ Collect?
      Please reply to my email : officedoc43@gmail.com

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