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 When the seller
intends to have the goods stuffed in container(s) at CFS, he can deliver the
goods “FCA stuffed in container(s)” at CFS.
A FCA delivery
of FCL cargo at CFS is in practice made on the conditions that the risk of
loss or damage to the goods shall pass from the seller to the buyer at the
time of completion of stuffing of goods in container(s), thus a modification
of Incoterms 2000.
It is buyer’s
responsibility to arrange with the nominated carrier for timely provision of
containers subject to acceptance by seller and independent surveyor and for
provision of necessary dunnage materials required for stowing, lashing and
securing the goods in containers. The buyer has also to notify the seller in
advance when the containers are available for stuffing. But what happen if
the independent surveyor rejects the containers provided by nominated
carrier or the nominated carrier fails to provide the containers in due
time? Here is an example of clause I use in FCA contracts to address such
situation:
“In the
event when the nominated carrier fails to provide suitable containers and
take the delivery of goods within the time schedule agreed …… for other
reasons than Force Majeure, the Seller shall procure itself 20’ TEU
containers and deliver the stuffed containers to a freight forwarder against
a Forwarder’s Certificate of Receipt evidencing that goods are held at its
disposal. All the additional costs incurred by Seller for this operation,
including the costs of procuring the containers and insuring the goods while
at Container Freight Station, shall be evidenced in the commercial invoice
and be added to the final price of goods.
In such
circumstances the Seller shall be entitled to present under documentary
credit instead of Bill of Lading the Forwarder’s Certificate of Receipt
accompanied by a Survey Report issued by Messrs. ….… attesting that
containers are in a satisfactory condition …...”
For L/C I
drafted a special clause to allow the seller receive the payment against
tender of FCR instead of Bill of Lading.
47 ADDITIONAL
CONDITIONS:
“In
the event when the nominated carrier fails to provide suitable containers
and take the delivery of goods until the date …/…/…… , the payment shall be
made against the presentation of the following documents:
-
One original plus two copies (1/1) of Commercial Invoice
- One
original and one copy (1/1) of Forwarder’s Certificate of Receipt
issued by Messrs. ………… evidencing that the goods have been taken in charge
on the date …/…/ …. and that the goods are held at the disposal of
………(beneficiary),
stuffed in containers.
Forwarder’s
Certificate of Receipt to show the container nos. and that the type of
container used for stuffing of goods is 20’ … container.
- One
original and one copy (1/1) of Container
Survey Report issued
by Messrs. … attesting that containers used for stuffing of goods are in a
satisfactory condition and that …………..”
Except for Bill
of Lading, in SWIFT Field 47A will have to be stated again the conditions
for the rest of documents: invoice, inspection certificate, packing list; to
prove that seller met his delivery obligations.
[Comment added
5 April 2008]
I have been
asked to clarify why I said that FCR to indicate that goods be held at the
disposal of supplier (i.e. L/C beneficiary). The company for which I had
been asked to write the respective terms was transporting the goods by rail
to CFS for stuffing in containers and then the stuffed containers were moved
to a nearby port terminal. I wrote the respective clause to address the
situation when the freight forwarder nominated by buyer is unable to arrange
timely delivery of suitable
containers to CFS, as it may happen in heavy shipping season. It must be
made a distinction between the situation when the freight forwarder is hired
by buyer and the situation when the freight forwarder is hired by seller.
If forwarder is hired by the buyer, then it acts as agent of buyer and once
it has taken the goods in charge the seller losses the control over them.
That's why in FCA sales of LCL cargoes the bank issuing the L/C is required
to be named as consignee in FCR.
When forwarder is hired by seller it acts as agent of seller in following
the instructions set in FCR. Named consignee, e.g. issuing bank, can cancel
the seller's instructions for holding the goods and give new instructions
only after it surrenders FCR to forwarder, so seller is would be protected.
However, most exporters are not willing to take the chance and require a
document with which they can keep control over the goods at CFS.
 The problem with FIATA
FCR is that it has been designed for two options only:
-
either for
the situation when the freight forwarder receives instructions to hold the
goods at the disposal of consignee
-
or for the
situation when the freight forwarder receives instructions to forward the
goods to the consignee named in document.
To give exporter I dealt with the peace of mind I suggested that FCR show
him as both supplier and consignee since the document was required to
indicate that goods are held at his disposal. In the meantime I get the
idea that instead of ticking one of the two boxes available for the
options inserted on FCR, the exporter may require his trusted freight
forwarder to make a notation on the face of FCR confirming that the goods
have been stuffed in containers and taken in charge at the named place and
date and are held at the disposal of supplier pending further
instructions. Here is an example of wording for L/C:
"One original and one copy (1/1) of Forwarder's Certificate of Receipt
issued by Messrs. ......... confirming that the goods have been stuffed in
containers and taken in charge at ... (CFS) ... on the date .../.../ ...
and are held at the disposal of beneficiary pending further instructions.
Forwarder's Certificate of Receipt to show the container nos. and that the
type of container used for stuffing of goods is 20' ... container."
Kind regards,
Vlad Cioarec
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