Which statement about FCA and FOB is correct regarding risk transfer points and who arranges main carriage?

• A. FCA transfers risk when goods are handed to the carrier at the named place; the buyer arranges main carriage; FOB transfers risk when goods pass the ship's rail at the port of shipment; the seller arranges loading; main carriage is not arranged by the seller under FOB.
• B. FCA transfers risk when goods are loaded on the vessel; the seller arranges main carriage; FOB transfers risk when goods are handed to the carrier at the named place; the buyer arranges loading.
• C. FCA and FOB both transfer risk when goods are delivered to the buyer; the seller always arranges main carriage.
• D. FCA transfers risk only after goods have arrived at the destination; FOB transfers risk at arrival.

Answer: (A)

The key idea is exactly when risk passes from seller to buyer and who handles the main carriage for each term. For Free Carrier, risk passes when the goods are handed over to the carrier at the named place, and from that moment the buyer is responsible for arranging the main carriage. The seller clears export and delivers the goods to the named carrier there, at which point the risk shifts.

For Free On Board, risk transfers when the goods pass the ship’s rail at the port of shipment, and the seller is responsible for loading the goods onto the vessel. The buyer then arranges and pays for the main carriage for the sea voyage from that point onward.

The other statements misstate either the exact moment of risk transfer or who arranges the main carriage, which is why they’re not correct.