Fca is the rule of choice for containerized goods

Info icon This preview shows pages 8–11. Sign up to view the full content.

FCA is the rule of choice for containerized goods where the buyer  arranges for the main carriage. Since New Mexico shares the borderline with Mexico the  best possible incoterm for transport would be Free Carrier (FCA).  We can ship by land or air. The seller is responsible for pre- carriage, and the buyer is responsible for main carriage. Although  Ex Works would be the cheapest for us, with cross border  transactions, this rule can present practical difficulties. Specifically, the exporter may still need to be involved in export reporting and clearance processes, and cannot realistically 
Image of page 8

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

leave these to the buyer. This rule transfers all risk from the seller  to buyer once the goods have reached its named place. It also  allows the seller to not be responsible for insurance for pre- carriage. Since we will be using a containerized good, the FCA  rule is the obvious choice because the buyer arrangers for the main  carriage. *This gives us these four groups: Buyer responsible for all carriage – EXW Buyer arranges main carriage – FAS; FOB; FCA Seller arranges main carriage, risk passes after main carriage –  DAT; DAP; DDP Seller arranges main carriage, but risk passes before main carriage  – CFR; CIF; CPT; CIP Payment Terms Cash Advances * Usually occurs before shipment * There is no risk to the seller because they receive the money * Risk to buyer because the goods must be completed perfectly  according to the order * Open Account * Prior to orders, the open account has come to a mutual agreement on both sides. * Goods available to buyer before payment * Risk to seller because of this * No risk to buyer because of agreement * Letters of Credit * Invoice given to buyer and is required to match letter of credit  exactly * Contains strict terms and conditions
Image of page 9
* Confirmed/Unconfirmed Irrevocable Credit * Assurance conducted by a bank by presenting certain  documentation * May add other costs to seller * Relies on seller to ship goods as stated in documents * Terms and conditions can be changed before letter of credit  agreement to decrease the buyer’s risk * Goods available to buyer after payment * Seller paid after goods have been shipped and proper  documentation is presented to the bank * Drafts * Transferred funds from the bank of the buyer to the bank of the  seller * Terms and conditions naturally occur because of usage of banks,  however they are a mutual agreement * Usually reviewed by banker and/or freight forwarder to give you  (buyer/seller) the best available options ; -
Image of page 10

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 11
This is the end of the preview. Sign up to access the rest of the document.
  • Spring '11
  • gsrg
  • Green Stuff

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern