What does Forwarders Certificate of Receipt (FCR) mean?

A Forwarder’s Cargo Receipt (FCR) (AKA Forwarder’s Certificate of Receipt) is a document issued by a freight forwarder to the shipper that serves as certification of the receipt of cargo. Once issued, the consignor assumes full responsibility for the shipment.

A forwarder plays a pivotal role in international trade by overseeing cargo shipping and related logistics. This involves coordinating the sending and receiving of cargo, as well as handling tasks like unloading, loading, and packing. One essential document in the realm of international shipments is the Forwarder's Certificate of Receipt (FCR), a standard trade document established by FIATA for common use.

When is the FCR document required?
The FCR is typically utilized in international transactions where the Ex Works (EXW) term is agreed upon. In EXW, the seller bears responsibility for delivering the shipment to the buyer at a specified location and time. Consequently, the seller assumes all risks and costs until the shipment is handed over to the buyer.

The FCR is also crucial in transactions where payment is facilitated through a letter of credit, often mandated by banks. Notably, this document is exclusively accessible to FIATA members.

Key Features of the FCR:

Lack of Contract of Carriage: The FCR does not contain a contract of carriage, making it unsuitable as a transport document for letters of credit.

Forwarder's Certification: When issuing the FCR, the forwarder certifies to the seller that they are responsible for the shipment and guarantee its delivery to the buyer in optimal condition.

Non-Negotiability: The FCR is non-negotiable, meaning the recipient does not need to present the original document to receive the shipment from the shipping company.

Non-Transferability: As a non-transferable document, the FCR cannot be endorsed. This characteristic allows the seller to receive payment promptly upon handing the product to the forwarder and obtaining the FCR.

Invalidation Process: Invalidating the FCR is only possible when the forwarder receives the original document.

Comparison with Sea Waybill (Bill of Lading):
One significant distinction between the FCR and the sea waybill lies in the inclusion of the contract of carriage. Unlike the FCR, the sea waybill encompasses this contractual agreement between the loading and unloading ports.

In the case of the sea waybill, at least one original waybill must be submitted to the forwarder for the product's delivery. Conversely, the FCR allows the receiver to obtain the shipment from the forwarder without surrendering the waybill.

Additionally, while the sea waybill is transferable, the FCR remains non-transferable. It is crucial for businesses engaged in international trade to understand these nuances when selecting the appropriate document for their transactions.