The document discusses the use of Forwarder's Certificate of Receipt (FCR) in international trade. It defines FCR as a certificate issued by a freight forwarder to confirm receipt of goods from a shipper and commitment to arrange shipment. The document outlines the concept and functions of FCR, including that it serves as proof of receipt for the shipper but not a document of title. It also discusses the process of issuing an FCR and its use in transactions such as those involving letters of credit.

1. The use of
in international trade
Danny Diep To, Lecturer
MBA, BSc, BEcon,
diepto.pro@gmail.com
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2. (C) Copyright 2
1. The concept of FCR
The use of FCR in international trade

3. 1. The concept of FCR
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•FCR stands for FIATA Forwarder's Certificate of
Receipt, is one of the operational documents of
Freight Forwarding.
•FCR has been proposed to use for international
Freight Forwarders within FIATA organization since
1955.

4. (C) Copyright The use of FCR in international trade 4

5. (C) Copyright The use of FCR in international trade 5
•FCR is itself a Certificate of shipping instructions
issued by Forwarder confirmed that he has received
the goods as stated in FCR with external status in
good condition from Shipper and he has been
keeping them to make an irrevocable shipment to
the nominated Consignee or hold that shipment at
Consignee’s disposal.

6. (C) Copyright The use of FCR in international trade 6
•Shipping Instructions (FIATA Forwarding
Instructions-FFI) is an agreement between Shipper
and Consignee that can be only cancelled or
modified if original FCR returned and provided that
Forwarder could still implement that cancellation or
modification.
•FCR originally used when Supplier sells the goods
under Ex Works (EXW) terms and must prove that
they have fulfilled the obligations to Buyer by
presentation of FCR.

7. (C) Copyright The use of FCR in international trade 7

8. (C) Copyright The use of FCR in international trade 8
•In the case of Letter of Credit (L/C) payment
method, Seller under these conditions can present a
FCR issued by Forwarder together with other
shipping documents to get payment that Buyer
placed at Seller’s disposal under L/C stipulations.

9. (C) Copyright The use of FCR in international trade 9


10. (C) Copyright 10
2. Function of FCR
The use of FCR in international trade

11. 2. Function of FCR
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•FCR has no function of a document of title of goods,
nor is one Transport Contract for goods described on
the front of this document.
•FCR is simply one receipt, issued to Shipper to
support L/C payment. However, FCR may also be
evidence of a Bailment/ Handling Contract.

12. (C) Copyright The use of FCR in international trade 12
(1) Cargo Receipt from Forwarder
(2) Document of title of goods
(3) Evidence of Transport Contract
Function of FCR

13. (C) Copyright The use of FCR in international trade 13
•Since the goods will be delivered to the straight
Consignee mentioned in FCR and delivery of goods
to Consignee shall not depend on the presentation of
FCR to Forwarder or his Agent, so that FCR is a
non-negotiable document.
•There is one common misconception about the
status of the FCR is that they will be issued "order"
(To order) of Consignee or opening bank.

14. (C) Copyright The use of FCR in international trade 14
•FCR is not a transport document because of not
determine the actual delivery, it is just the receipt of
goods of Forwarder only. FCR will be accepted by
bank if so stipulated in the L/C.

15. (C) Copyright The use of FCR in international trade 15

16. (C) Copyright The use of FCR in international trade 16
•According to UCP 600, the documents is not
considered as Transport Documents and Transport
Contracts in accordance with Articles 19 to 25,
including:
-Delivery Order (D/O),
-Mate's Receipt (M/R)
and Forwarder’s documents such as:
-Certificate of Receipt (FIATA FCR),
-Certificate of Transport (FIATA FCT),
-Warehouse Receipt (FIATA FWR).

17. (C) Copyright The use of FCR in international trade 17

18. (C) Copyright The use of FCR in international trade 18

19. (C) Copyright 19
3. Terms and Conditions of FCR
The use of FCR in international trade

20. 3. Terms and Conditions of FCR
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•General Business Conditions (or Standard Terms
and Conditions) of Freight Forwarding industry of
issuing country are printed on backside of FCR.
•Document can only be used for Forwarders
complying with these terms and conditions in
Freight Forwarding business activities.

21. (C) Copyright The use of FCR in international trade 21

22. (C) Copyright 22
4. Liabilities of Forwarder
The use of FCR in international trade

23. 4. Liabilities of Forwarder
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•For FCR, Forwarder confirmed that he owns the
goods with an irrevocable shipping instructions to
Consignee or put them in Consignee’s disposal.
•When FCR issued, Forwarder assumed delivery
responsibility at destination through his nominated
delivery Agent, but under the role of Forwarder,
rather than the Carrier.

24. (C) Copyright The use of FCR in international trade 24
•Under US law, sanctions aspects of the service is
very important and therefore, Forwarder in the
majority of cases is considered "indirect Carrier".
For sea transport, they are considered as Non-Vessel
Common Carrier (NVOCC).
•Forwarder is also often recommended to purchase
Forwarder’s Liability Insurance for FCR.

25. (C) Copyright 25
5. The main contents of FCR
The use of FCR in international trade

26. 5. The main contents of FCR
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a. Shipper’s name or Forwarder’s name
b. Consignee’s name and address
c. Marks and numbers
d. Number of packages, packing method
e. Description of goods
f. Gross weight
g. Measurement
h. Date and place of issuance
i. Instructions for freight and charges
j. Other notations

27. (C) Copyright 27
6. Issuing of FCR
The use of FCR in international trade

28. 6. Issuing of FCR
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•Right after Forwarder received the goods, Forwarder
at Port of Loading can immediately issue and release
FCR to Shipper. Forwarder needs to take some
important notes of the main points are as follows:
1) Forwarder or his Agent (branch, neutral
Forwarder) received the goods as described in FCR
and the goods are in the custody of Forwarder.

29. (C) Copyright The use of FCR in international trade 29
2) The external status of goods are in good condition.
3) Details showing on document are clearly consistent
with the shipping instructions that received by
Forwarder.
4) The conditions of other transport documents (Bill
of Lading-B/L, etc.) not contrary to the obligations
that Forwarder must comply under FCR.

30. (C) Copyright The use of FCR in international trade 30
FCR
FCR
FCR
EXW FCA/FOB
(LCL)

31. 6.1 Process of issuing of FCR for LCL export
cargo under FOB/FCA in form of Buyer’s
Consolidation performed by Forwarder
including key steps:
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1) Receive the export cargo information from Seller;
2) Verify the accuracy of information: Buyer’s name,
Order numbers (P/O numbers), categories, types,
quantities, ready shipping date, Port of Discharge...);
3) Receive the Shipping Instructions and other
documents from Seller;
4) Confirm and send Booking/ Shipping Note to
Seller;
5) Seller complete Customs clearance and stuff the
goods into CFS warehouse;

32. (C) Copyright The use of FCR in international trade 32

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6) Liaise the Warehouse Section to get the accurate
shipment details stuffed into warehouse (Cargo Receipt);
7) Issue the draft FCR to Seller for checking and original
FCR after confirming the correctness of FCR;
8) Send Pre-Advice to Buyer about shipment details and
export plan enabling Buyer to confirm shipment of goods;
9) Contact Shipping Line to book the container and send
Container Release Order to Warehouse Section to pull the
empty container to CFS warehouse;
10) Stuff the LCL shipments into consolidated container,
finish the Customs liquidation and drop off the laden
container to export CY waiting for loading to the ship;

34. (C) Copyright The use of FCR in international trade 34
(1)Receive
information
(2) Verify
information
(3) Receive
Shipping
Instructions
(4) Send
Shipping Note
(8) Send Pre-
Advice to
Buyer
(7) Issue
FCR
(6) Get
shipment
details
(5) Stuff cargo
into
warehouse
(9) Book
Container
with S/Line
(10) Pack
cargo into
container
(11) Prepare
Master SWB
(12) Check
original
documents
(13) Send
original
documents
FCR ISSUING PROCESS

35. (C) Copyright The use of FCR in international trade 35
11) Send the consolidated container details to
Shipping Line to prepare Master Sea Waybill (or
Surrendered MBL), marked Freight Collect and
confirm the correctness.
12) Check the original documents handed over by
Seller: Commercial Invoice; Packing List; C/O… If
correct, make a set of photocopy documents for
records.
13) Send the shipping documents to Agent at Port of
Discharge by email or EDI: FCR, Master Sea Waybill
(or Surrendered MBL), Commercial Invoice;
Packing List; C/O... and send the original documents
of Seller to Agent at Port of Discharge by express
courier.

36. (C) Copyright The use of FCR in international trade 36
•Since delivery of goods to Consignee is not depend
on the presentation of FCR, it is just to release one
single original FCR, non-negotiable. Upon request
additional copies, it must be noted in FCR "Copy,
Non-Negotiable”” to avoid disputes.
•All FOB costs at Port of Loading port will be borne
by Shipper. Shipment date is issuing date of FCR. A
set of shipping documents must be presented within
the permitted period of time as from issuing date of
FCR.
•Shipper has to pay FCR fee, similarly as B/L fee or
documentation fee.

37. (C) Copyright The use of FCR in international trade 37

38. 6.2 FOB/FCA costs at Port of Loading for
LCL export goods including:
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-Export documents preparation fees (Customs
declaration fee, C/O fee, Inspection fee, FCR fee ...);
-Truck loading cost at Seller’s warehouse/ factory and
Trucking cost;
-Expenses for consolidated container in CFS (CFS
charge);
-Export Tax / Duties;
-Other costs…

39. (C) Copyright The use of FCR in international trade 39
(1)Export
Document
preparation
fees
(3) CFS
charges
(2) Loading
costs
(4) Export
Tax/ Duty
(5) Other
charges
FOB/FCA
charges

40. (C) Copyright 40
7. The use of FCR
in international trade
The use of FCR in international trade

41. 7. The use of FCR in international trade
(C) Copyright The use of FCR in international trade 41
•FCR allows Forwarder to issue a special document
to Shipper for the purpose of official confirmation
that Shipper has fulfilled all obligations for the
goods and the goods finished the export procedure.
•According to Sales Contract, Seller delivers the
goods to Buyer or the Carrier (or Bailee) whether
appointed by Buyer or not) with the aim of
transferring of goods to Buyer and without retaining
the right to dispose of the goods, Buyer is deemed to
have owned the unconditional goods under the
contract.

42. (C) Copyright The use of FCR in international trade 42
•FCR is used in order to reduce the difficulties that
often occur in international trade transactions.
Forwarder can accomplish consolidating the goods
from many different suppliers.
•Each individual suppliers may sell under Ex Works
(EXW) terms and therefore they are entitled to
receive the money as soon as he delivered the goods
to Forwarder.

43. (C) Copyright The use of FCR in international trade 43
•Today, the trend is to use more and more popular
FCR in international trade due to high economic
efficiency of LCL consolidation form and custom
usages FOB terms for export shipment of some
exporting countries.
•Scope uses of FCR also been extended to other
terms such as FOB/ FCA, is the most typical form of
Buyer’s Consolidation from many different
suppliers for individual sea export shipments
(sometimes by air) consolidated into the CFS
warehouse of Forwarder to pack into the export
container.

44. (C) Copyright The use of FCR in international trade 44
BUYER’S CONSOLIDATION PROCESS
Supplier
1,2,3,4
CFS
Warehouse
Origin Destination Buyer
Cargo Truck Cargo Truck
Container Truck Container TruckSea
Air

45. (C) Copyright The use of FCR in international trade 45
•With EXW terms, FCR is only apply to commodities
exempted from Customs inspection, free tax/duty
commodities and non-prohibited/ non-restricted
commodities, while export clearance mostly will
not encounter any difficulties to avoid the delicate
situation: Seller delivered the goods, FCR issued,
Banker disbursed for the goods, but the goods are
still lying trapped in exporting countries, Buyer did
not receive the goods.
•As for FOB/FCA terms, FCR was released shortly
after export clearance done and the goods stuffed
into CFS warehouse.

46. (C) Copyright The use of FCR in international trade 46
•In normal situations, Shipper will receive 1 FIATA
B/L (FBL) to implement the document requirements
stipulated in L/C.
•However, Forwarder is sometimes required to
receive goods for consolidation (as well as being
able to perform additional services such as
packaging, labelling, marking...) and may be
because he did not want to issue B/L (Received for
shipment FBL) as NVOCC.

47. (C) Copyright The use of FCR in international trade 47

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•Since Shipping Line in fact did not receive the
goods in hands, therefore Forwarder should not
issue FBL and Shipper will be delays in receiving of
payment.
•FCR can overcome that inconvenience: it makes the
guarantee for Buyer that Seller has delivered and
can not get back the goods delivered.
•So, Buyer can make payment to Seller through the
presentation of FCR or he requires banks to accept
FCR for disbursement under the L/C.

49. (C) Copyright The use of FCR in international trade 49
•The use of FCR also avoid the hassle of switching
FBL in triangle business under FOB/FCA terms
with L/C payment method, is what both Forwarder
and banks are reluctant to perform, in which the
intermediate Buyer wanted to remain Supplier’s
name and the ultimate Buyer anonymous that they
do not know each other.

50. (C) Copyright The use of FCR in international trade 50
•Forwarder reluctant reissued 1 set of switched FBL
when he received 1 set of initially original of FBL to
cancel.
•Instead, the intermediate Buyer will hand over the
FCR issued by Forwarder in exchange for FCT or
FBL. Forwarder will issue FCT or FBL only when
the goods are in his custody and did not have any
other claims against such shipments.

51. (C) Copyright 51
8. Important notes when using FCR
The use of FCR in international trade

52. 8. Important notes when using FCR
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•When issuing FCR, Forwarder has ensured that the
goods will not be delivered back to Shipper: this is
one important factor to boost confidence for this
document.
•Once FCR is transferred to Buyer upon presentation
for payment, Seller has transferred the rights of
contract to Buyer and Seller has no longer any right
to stop or delay the transportation of goods.

53. (C) Copyright The use of FCR in international trade 53
•When FCR granted to Shipper, he can not be
considered to have reserved the right to dispose of
goods. One “To order” FBL will demonstrate
reserve the right to dispose of it.
•FCR is one auto-release document to Consignee
mentioned in FCR. The one who claims for delivery
of goods must prove that he is the right Consignee
mentioned in FCR.

54. (C) Copyright The use of FCR in international trade 54
•When the goods arrive at Port of Discharge,
Forwarder’s Agent at that port shall immediately
deliver the goods to the Applicant (Buyer).
•If Buyer has taken delivery of goods while Seller
has not received payment for reasons such as: L/C
expired, late presentation and discrepant
documents... if Buyer did not want making payment
due to L/C expired, they simply just request the
bank to dishonor the drawing and then Seller will
suffer the consequences.

55. (C) Copyright The use of FCR in international trade 55
•As it is common misunderstanding about the nature
of FCR, Seller needs to pay attention to the correct
application and know the limitations of FCR when
asked to use this document.

56. (C) Copyright 56
9. Conclusion
The use of FCR in international trade

57. 9. Conclusion
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•FCR is a Forwarder’s document to confirm that
Seller has delivered the goods to Forwarder for
shipment to Consignee at a place of receipt in Port
of Loading with the external status of goods in good
condition, the goods are placed in irrevocable
disposal of goods or as instructed by Consignee, the
goods is not unencumbered or owned by any 3rd
party and non-prohibited for export.

58. (C) Copyright The use of FCR in international trade 58
•FCR is non-negotiable and no function of a
document of title of goods, a Transport Contract as
FCT and FBL.
•Today, the trend is to use more and more popular
FCR in international trade for LCL cargo transported
by sea or shipments must stuff into warehouse
before loading on the other means of transport.

59. (C) Copyright The use of FCR in international trade 59
•The advantages of FCR bring to the relating
parties such as:
-Shipper can quickly get payment;
-Consignee can take delivery of goods upon arrival; -
-Forwarder can do consolidation or other handling
services conveniently; or
-when issuing switched FBL, Forwarder can issue
FCR under the right role of Forwarder; and
-FCR is one kind of documents to do Customs import
clearance…

60. (C) Copyright The use of FCR in international trade 60
•However, it is advisable that the FCR user need to
master how to use, quick preparation and accurate
documents to present for the drawing on time to
avoid the damage that can occur when the goods
have been delivered to Consignee while Shipper has
not received payment from the bank. /.

61. (C) Copyright 61
 References
The use of FCR in international trade

62.  References
(C) Copyright The use of FCR in international trade 62
• BIFAlink, What does FCR mean? (www.bifa.org)
• TT Talk, Forwarder's Cargo Receipts - What role are Forwarders taking?
(www.ttclub.com)
• Ozgur Eker, What is FIATA FCR (Forwarder’s Certificate of Receipt)?
(www.letterofcredit.biz)
• Lin Zhong, FIATA-Documents-and-Trade-Logistics-Standardization
(www.carecprogram.org)
• PWC, Acceptance of forwarders’ cargo receipt in lieu of bill of lading in
export transactions, (www.pwc.in)
• Hachem Jalouli, Forwarders’ Cargo Receipt (FCR) is not a Transport
Document, (www.besttradesolution.com)
• Pachino, Bill of Lading and Freight Forwarders Cargo Receipt,
(http://letterofcreditforum.com)
• Reserve Bank Of India, Export of Goods and Services - Forwarder’s
Cargo Receipt, (https://rbi.org.in)

63. (C) Copyright The use of FCR in international trade 63
• Oleg Alyoshin et al., 2010, Ukraine: Forwarders Certificate of Receipt:
The Story of One Case, (www.mondaq.com)
• Jan H. Raymond, How Do FCR's and B/L's Differ, (http://raymond-
international.com)
• YOW-Your Other Warehouse, 2013, Standard Document Checking
Requirements, (https://homedepotlink.homedepot.com)
• Conex, FIATA Documents, (www.conexbe.be)
• APLL, Forwarder Certificate Of Receipt (FCR), (www.katag.net)
• Sherri Lane, 2012, Incoterms®2010; what you really need to know
(http://tradetechnologies.com)
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