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INCOTERMS 2010 – Free Carrier at PLACE

INCOTERMS 2020 – Free Carrier at WAREHOUSE or Free Carrier at PORT/AIRPORT

The previous version provided ONE risk transfer point at first carrier and unanimous seller obligation for Inland Freight, port charges and forwarder fees, while INCOTERMS 2020 offered 2 options. Buyer and Seller are to decide the LOCATION, either Seller’s warehouse or Port/Airport. The risk and obligation changed according to the decision.

Scenario A - Free Carrier at WAREHOUSE

1. Collection of Goods at the Seller’s premises by the Buyer’s own transportation (or by his agent)

2. Seller has the responsibility in carrying the Goods by making sure it is loaded safely on the transportation by the Seller’s arrangement (either manual manpower or forklift).

3. Risk passed to buyer when it is loaded in Buyer’s transport

4. Buyer pays for the inland freight, Origin Port Charges and Forwarder Fees

5. Suitable for domestic land transport

Scenario B - Free Carrier at PORT/AIRPORT

1. Seller will arrange the delivery of Goods by either his own truck or his agent’s transportation to the Airport

2. Seller to handover the Goods to the Buyer’s appointed forwarder at the Airport cargo terminal

3. Risk passed to buyer when it is handed over to forwarder (Buyer’s agent).

4. Seller pays for the inland freight, Origin Port Charges and Forwarder Fees

5. The Seller is responsible to ensure local customs formalities are properly performed & done, as the Goods can only be allowed to export once the consent from the authorities is obtained.

6. Suitable for domestic/international AIR freight. *Suggest going for FOB if you are using Sea Freight as the risk transferred to buyer AFTER cargo is on board vessel)

On the other hand, as one of the seven (7) key changes as well highlighted in the implementation of Incoterms 2020, i.e. “FOB, FCA & Bills of Lading (B/L)”, the “Shipped on Board” B/L under Sea Mode, will only be issued & released to the Seller, once the Cargo or Export Container is confirmed loaded on board the intended vessel, as to comply to the L/C requirements (regardless whether the Incoterms applied is either FOB or FCA).