Distinguish between CFR and FCA under Inco terms 2020 (2024)

Compare FCA and CFR from Inco terms 2020 point of view

The following information explains about the difference between CFR and FCA under Incoterms 2020.

As you are aware FCA means Free Carrier to a named destination agreed between buyer and seller under their contract of carriage where in the seller’s responsibility on costs and risks for movement of goods transfers to buyer when goods are loaded to the Carrier nominated by the Seller. CFR means Cost and Freight to a named place mentioned under contract of carriage between buyer and seller.

CFR is a marine restricted delivery rules and is used for movement of goods by water mode of transport only. But FCA rules of delivery are meant for all modes of transport for movement of goods. (Land, Sea and Air).

Under CFR terms of delivery of goods, the exporter is liable to bear the cost of movement of goods to the named location at importer’s country. But under the FCA delivery terms, the exporter transfers his cost of movement of goods when goods are loaded to the carrier nominated by the importer.

The risk under CFR terms of delivery passes from exporter to importer immediately upon the goods gone onboard the vessel, although the exporter meets the cost of movement of goods to the named place at importer’s country. So the risks and costs move equally from exporter to importer under FCA terms whereas the risks and costs do not move from importer to exporter equally under CFR terms.

So the cost of movement of goods transfers from exporter to importer in exporter’s country under FCA. But under CFR terms, the cost of movement of goods passes from exporter to importer at the named place in importer’s country.

Under CFR terms, the main carriage cost is undertaken by the exporter and he has control over freight. But under FCA rules, the exporter does not have the control over main carriage.

*FCA diagram shown above is meant for movement of goods for exports, wherein named place is Port of loading. FCA delivery term means loading goods to the means of transport provided by the buyer or placing them at the disposal of the buyer’s carrier. Read the separate post about FCA in this website for better understanding.

Two detailed posts about FCA and CFR are available in this website to understand both terms easily. You may click below links to read the same for easy understanding as the same are explained in simple language:

CFR Cost and Freight

FCA Free Carrier

We hope, the above information helps you in understanding the difference between FCA and CFR terms of delivery rules according to Inco Terms 2020 published by International Chamber of Commerce. Would you like to add more information based on your understanding and experience about the distinguish between FCA and CFR, share below your thoughts.

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