Difference Between FCA and Ex Works (With Table)

Courier services have become an inevitable part of our lives. However, it may be hard to choose the most appropriate career service. FCA and Ex-Works are two types of courier services offered to customers. While the two offer services of transportation to the buyers, they vary considerably.

FCA vs Ex Works

The difference between FCA and Ex-Works is that FCA agents deliver the products to the location specified by the buyer in advance. In contrast, Ex Works agents are only responsible for the delivery of the item at the factory site. Thereafter, it is the sole responsibility of the buyer. 

FCA refers to a form of trade wherein the seller has to deliver the product to the location specified by the final consumer. An advantage of FCA is that the buyer doesn’t have to bother regarding any kinds of export details and licenses because it is the primary duty of the seller. 

Ex-works refers to an international shipping term. It segregates the responsibility of the delivery item between the buyer and seller. The risks and the shipping costs associated with Ex works items is the sole duty of the buyer. Thus, the seller holds no legibility to pay for transportation costs. Ex-works has an application to cover only the limited responsibilities associated with the delivery item. 

Comparison Table Between FCA and Ex Works

Parameters of ComparisonFCAEx Works  
Definition FCA refers to a form of trade wherein it is the duty of the seller to deliver the product to the location specified by the final consumer.Ex works segregates the responsibility of the delivery item between the buyer and seller. 
Site of delivery FCA agents deliver the products to the location specified by the buyer in advance. Ex Works agents are only responsible for delivering the item at the factory site.
Examples of delivery locationThe location of delivery is usually a warehouse, airport, shipping terminal, or any other destination where the carrier operates.The location of delivery is usually a factory site. 
Suitable forFCA is suitable for international trade.Ex works are suitable for domestic trade.
Unloading responsibility FCA is responsible for the unloading of the delivery item.Ex Works plays no role in unloading. 

What is FCA?

FCA, also known as a free carrier, refers to a form of trade wherein the seller has to deliver the product to the location specified by the final consumer. Here, the implication of the word free is that the seller must deliver the item to the place specified in advance. Once the product is delivered, the buyer bears all the risks and costs. 

The location of delivery is usually a warehouse, airport, shipping terminal, or any other destination where the carrier operates. The transportation costs are included in the price. Till the time of delivery, the responsibility of the product is towards the carrier. In the case of FCA, the carrier doesn’t have an obligation to unload the goods. 

An advantage of FCA is that the buyer doesn’t have to bother regarding any kinds of export details and licenses because it is the primary duty of the seller. FCA is responsible for the unloading of the delivery item. The buyer has the provision to choose the location of delivery that best suits his interest. 

An example of FCA is when Sam seller ships goods to Jacob buyer. Jacob agrees to use his shipper with whom he has done business before. Sam agrees and he must deliver the products to the shipper. After this, the responsibility passes to Jacob. Thus, FCA is an ideal courier service. 

What is Ex Works?

Ex-works refers to an international shipping term. It segregates the responsibility of the delivery item between the buyer and seller. In this situation, the buyer has the responsibility to cover the transportation costs. Once the product is delivered to the specified location, it becomes the buyer’s asset. 

The seller has no obligation to load the delivery item on the buyer’s vehicle. The main responsibility of the ex-works facility is to pack the delivery item, label it appropriately, and effectively deliver them to the destination specified by the buyer. 

The insurance of the product is also looked after by the buyer in case of the ex-works services. Ex-works have been sanctioned by the International Chamber of Commerce. The risks and the shipping costs associated with Ex works items is the sole duty of the buyer. Thus, the seller holds no legibility to pay for transportation costs. 

Ex-works has an application to cover only the limited responsibilities associated with the delivery item. But, it provides an additional advantage to the buyers in the form of controlling the shipping charges. Thus, the buyer can ensure that the seller doesn’t charge them a significantly higher shipping fee for the product. 

Main Differences Between FCA and Ex Works

  1. FCA refers to a form of trade wherein the seller must deliver the product to the location specified by the final consumer. In contrast, Ex Works segregates the responsibility of the delivery item between the buyer and seller.
  2. FCA is suitable for international trade. On the other hand, Ex-works are suitable for domestic trade.
  3. FCA agents deliver the products to the location specified by the buyer in advance. In contrast, Ex Works agents are only responsible for delivering the item at the factory site.
  4. FCA agents deliver the products to the location specified by the buyer in advance. In contrast, Ex Works agents are only responsible for delivering the item at the factory site.
  5. FCA is responsible for the unloading of the delivery item. On the other hand, Ex Works plays no role in unloading.

Conclusion

Thus, FCA and ex-works differ in various aspects. In FCA, it is the responsibility of the buyer to arrange transportation. The seller has the provision to choose the location of delivery that best suits his interest. Once the product is delivered, the buyer bears all the risks and costs. 

Ex-works have been sanctioned by the International Chamber of Commerce. The risks and the shipping costs associated with Ex works items is the sole duty of the buyer. The buyer has the responsibility to cover the transportation costs. Once the product is delivered to the specified location, it becomes the buyer’s asset. To conclude, FCA and ex-works have considerable differences. 

References

  1. http://journals.manas.edu.kg/mjsr/archives/Y2015_V04_I05/98273124d5598619ce817e27ce2156ab.pdf 
  2. https://www.academia.edu/download/40848279/EXW__FOB_OR_FCA__CHOOSING_THE_RIGHT_INCOTERM_AND_WHY_IT_MATTERS_TO_MARITIME_SHIPPERS.pdf
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