We have a client who regularly ships from Hong Kong on an FOB basis. However, when importing goods by air shipment, we have no immediate counter part incoterm to use. Our client has used FCA in the past, but queries have been raised as to the validity of this, as this does not cover "local" charges i.e. terminal charge, handling charge etc.
Could we specify that goods are to be shipped "FCA HK Airport (all local charges included)", meaning that seller will pay all local costs.
Incoterms - Using FCA
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KimChristensen
- Posts: 404
- Joined: Fri Apr 05, 2019 5:21 pm
Incoterms - Using FCA
Dear Peter,
I am not sure this is the right question to give to bankers
It would be more natural for your customer to seek advises at his forwarder or Airline Company.
As far as I understand (not being an incoterms expert), the division of costs occurs at the delivery point, with the exception of charges for customs facilities, duties taxes etc.
So it seems to me that your (customers) concern is right. There will most likely occur costs after seller has delivered at Hong Kong Airport e.g. when cargo are loaded on to the aircraft.
If it is the intention of the parties (buyer and seller) that the costs you mention should be borne by the seller, I think it would be most relevant to state this is the commercial agreement – and inform the airline company, so that they can invoice correctly. This could then be reflected in the LC as you mention – perhaps even a bit more precise e.g.: FCA Hong Kong Airport (Incoterms 2000 - all local charges in Hong Kong included)
Again – I am not an incoterms expert, so if I was you I would see a second opinion at some transport guy
Best regards
Kim
I am not sure this is the right question to give to bankers
It would be more natural for your customer to seek advises at his forwarder or Airline Company.As far as I understand (not being an incoterms expert), the division of costs occurs at the delivery point, with the exception of charges for customs facilities, duties taxes etc.
So it seems to me that your (customers) concern is right. There will most likely occur costs after seller has delivered at Hong Kong Airport e.g. when cargo are loaded on to the aircraft.
If it is the intention of the parties (buyer and seller) that the costs you mention should be borne by the seller, I think it would be most relevant to state this is the commercial agreement – and inform the airline company, so that they can invoice correctly. This could then be reflected in the LC as you mention – perhaps even a bit more precise e.g.: FCA Hong Kong Airport (Incoterms 2000 - all local charges in Hong Kong included)
Again – I am not an incoterms expert, so if I was you I would see a second opinion at some transport guy
Best regards
Kim
Incoterms - Using FCA
Dear Peter,
Kim is right (again).Your client should ask for forwarder/air co.'s opinion and then come to you asking if ,from a banker's point of view (taking into consideration ucp/isbp art.) ,forwarder's/air co.'s opinion is acceptable or not.
bogdan.
Kim is right (again).Your client should ask for forwarder/air co.'s opinion and then come to you asking if ,from a banker's point of view (taking into consideration ucp/isbp art.) ,forwarder's/air co.'s opinion is acceptable or not.
bogdan.